Deprecation rate for solar power plant

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This discussion clarifies the depreciation rates applicable to solar power plants in the UK. According to the Income Tax Act 1961, solar plants are eligible for a 40% depreciation rate, with an additional 25% available as extra depreciation on capital expenditure, offering significant tax savings. The Companies Act 2013 considers a 15-year lifespan for depreciation purposes. It was also confirmed that the additional depreciation is specifically 20%.

Marimuthu

Marimuthu (Querist)

11 May 2023 Dear Experts,

What will be the Deprecation rate for solar power plant as per
Income Tax Act,1961.
Companies Act,2013.

Also whether the company claim the additional depreciation of 20% as per Section 32(1)(iia) of Income Tax Act,1961.

Pl clarify

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

11 May 2023 As per section 32 of income tax act 1961, Solar plant is eligible to avail 40% of depreciation. Extra depreciation of 25% on capital expenditure of Solar plant is a huge tax savings.
Under companies Act 15 years life is considered for depreciation

Marimuthu

Marimuthu (Querist)

11 May 2023 Dear Sir,

Thank you for your response.

I would like to confirm that the additional depreciation is either 20% or 25%

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

11 May 2023 It's 20% only.

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