Accelerated depreciation

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harshita rathi (Querist)
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21 November 2014 Sir, I want to know about the basic concept of accelerated depreciation & its benefit as well as its rates.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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21 November 2014 Accelerated depreciation is a method of depreciation used to depreciate the assets in a manner that greater deductions are allowed in the first few years. Accelerated depreciation can reduce costs during a company’s start up year. By increasing the deductions taken during the first few years of business, you will reduce your company’s overall tax debt.

Depreciation is one aspect of the tax, that facilitates greater investment in renewable energy and ultimately lower costs for consumers.

In solar projects, accelerated depreciation is widely used as an incentive to lessen the burden of tax. In India, Accelerated depreciation (AD) allows investors, mostly setting up capacity for captive use, to take advantage of up to 80% of the project cost.
For solar projects 80% ACCELERATED DEPRECIATION IS ALLOWED.

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