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Accelerated deprecation benefits

Tax queries 247 views 2 replies

Hi

I am trying to understand what accelerated depreciation is for solar panels. Based on my understanding, there is 80% depreciation for the 1st year. Based on my understanding, we can avail tax benefits for this 80%, i.e we pay lesser tax. For example, for a 1 MW plant the cost of it would be 6 crores. Now, due to accelerated depreciation, I can claim about 1 crore rupees tax benefit, i.e I would pay 1 crore lesser tax on my total income tax. But, what if I am a new company and I do not owe taxes amounting to crores every year ? How can I claim this 1 crore benefit ?

Replies (2)

Hi,

Unabsorbed depreciation can be carried forward and adjusted in future years with income for those years.

Regards

CA Shivani Mittal

Thank you.

Or , I was thinking if it would be possible to have the new company as a subsidary of an already existing company that pays taxes to the tunes of crores. So, that the parent company can save on the taxes and probably give the saved money on taxes to the subsidary ?


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