How does the AD logic work for solar projects?

The AD rate for solar power generation assets is 40% in the first year. For a ₹1 Crore solar plant, you can claim ₹40 Lakhs as depreciation in Year 1. At a 25% corporate tax rate, this results in direct tax savings of ₹10 Lakhs in the very first year.

Who is eligible for the Accelerated Depreciation benefit?

The AD benefit is for profit-making commercial and industrial entities that are actively paying corporate tax. Businesses in Kolkata, Bhubaneswar, Ranchi, and across East India are eligible if they capitalize and commission the solar plant on or before September 30 of the financial year.

What is the corporate tax rate used in the AD calculation?

The calculator assumes a standard corporate tax rate of approximately 25.17% for companies. Actual tax rates may vary based on your specific business structure and applicable tax laws.

What happens if I commission my solar plant after September 30?

If your solar plant is commissioned after September 30, a 20% depreciation is allowed in the first year, with the remaining depreciation rolling over to subsequent years.

Which industries can benefit from AD for solar?

All commercial and industrial entities can benefit, including manufacturing plants in Kolkata and Durgapur, IT parks in Bhubaneswar, mining operations in Ranchi, and other profit-making businesses across West Bengal, Odisha, Jharkhand, and beyond.

Commercial / Industrial Benefit

Accelerated Depreciation (AD) Scheme

Q: What is Accelerated Depreciation (AD) for solar?

Accelerated Depreciation is an incentive under Section 32 of the Income Tax Act that allows commercial and industrial entities to claim a higher depreciation rate (40%) on solar plant investments in the first year, significantly reducing taxable income and improving ROI.

A powerful tax-saving instrument under Section 32 of the IT Act. Commercial and industrial entities across East Indiaâ€”from manufacturing hubs in Kolkata and Ranchi to IT parks in Bhubaneswarâ€”can significantly reduce their corporate tax liability by investing in solar energy.

Calculate Your AD Tax Savings

Enter your project estimate to see your immediate Year 1 tax reduction.

Company / Factory Name

Phone Number

Location / Industrial Area

Estimated Solar Project Cost (?)

By submitting, you agree to our terms and conditions. Assumes standard 25.17% corporate tax bracket.

Calculating AD benefits...

Applying Section 32 IT Act depreciation rules.

Tax Summary

For a solar project cost of ? in , you can claim an Accelerated Depreciation of 40% in the first year.

Your estimated direct Year 1 Tax Savings is:

Our C&I specialists will call you on to discuss sizing and ROI.

What is Accelerated Depreciation (AD) for Solar?

Accelerated Depreciation is an incentive provided by the Government of India under Section 32 of the Income Tax Act. It allows commercial and industrial (C&I) consumers to claim a higher rate of depreciation on their solar plant investments in the early years of the asset's life. This heavily reduces the company's taxable income, thereby improving cash flow and accelerating the Return on Investment (ROI).

How does the AD logic work?

Currently, the AD rate for solar power generation assets is set at 40% for the first year. Here is how it impacts your bottom line:

Asset Valuation: If you install a solar plant worth ?1 Crore, you can claim ?40 Lakhs as depreciation in Year 1.
Tax Savings: Assuming a corporate tax rate of approximately 25%, a depreciation of ?40 Lakhs results in direct tax savings of ?10 Lakhs in the very first year.
Continuous Benefit: In subsequent years, you continue to depreciate the Written Down Value (WDV) at 40%, realizing further tax benefits.

Who is eligible for AD?

The AD benefit is explicitly meant for profit-making commercial and industrial entities. Businesses located anywhereâ€”from the tech parks in Bhubaneswar, the factories in Kolkata, to the mines in Ranchiâ€”are eligible as long as:

The solar plant is capitalized and commissioned on or before September 30 of the financial year (to claim the full 40%). If commissioned after September 30, a 20% depreciation is allowed in the first year, with the rest rolling over.
The business is actively paying corporate tax, as AD acts as a tax shield.