NewsBytes
    Hindi Tamil Telugu
    More
    In the news
    Narendra Modi
    Amit Shah
    Box Office Collection
    Bharatiya Janata Party (BJP)
    OTT releases
    Hindi Tamil Telugu
    NewsBytes
    User Placeholder

    Hi,

    Logout

    India
    Business
    World
    Politics
    Sports
    Technology
    Entertainment
    Auto
    Lifestyle
    Inspirational
    Career
    Bengaluru
    Delhi
    Mumbai

    Download Android App

    Follow us on
    • Facebook
    • Twitter
    • Linkedin
    Home / News / Business News / Exploring tax incentives to invest in India's renewable energy sector
    Next Article
    Exploring tax incentives to invest in India's renewable energy sector
    Refer to this guide

    Exploring tax incentives to invest in India's renewable energy sector

    By Sanjana Negi
    Jan 06, 2025
    05:34 pm

    What's the story

    India is on the cusp of a green energy revolution, and the government has rolled out a green carpet of tax breaks to lure investments into the sector.

    These incentives aim to slash the cost of establishing renewable energy projects and make green energy a more appealing investment option.

    Grasping these tax perks can assist investors and companies in making strategic decisions about investing in India's renewable energy sector.

    Depreciation

    Accelerated depreciation benefits

    A major incentive provided by the Indian government is the option for accelerated depreciation.

    Investors in renewable energy projects can claim a higher depreciation rate of up to 40% on their investments.

    This enables businesses to deduct a larger portion of their investment in the initial years, significantly reducing their taxable income.

    This benefit is especially advantageous for solar, wind, and biomass power projects.

    Expenditure deduction

    Deduction on expenditure for specified projects

    Under Section 80IA of the Income Tax Act, companies involved in developing, maintaining, and operating renewable energy projects can claim a 100% deduction on profits for 10 consecutive assessment years out of 15 years from the year they commence operations.

    These projects include solar power plants, wind mills, and hydroelectric plants, among others.

    This essentially boosts profitability and attracts more companies to invest in green energy.

    Duty exemptions

    Customs and excise duty exemptions

    In a bid to further decrease the financial strain on renewable energy projects, the government has eliminated customs and excise duties on specific components and equipment necessary for establishing these projects.

    This encompasses solar panels, inverters, wind turbines, and others, which are essential for renewable energy production.

    By reducing import expenses, this incentive fosters financial feasibility for companies to embrace green technology.

    Tax holiday

    Income tax holiday periods

    The Government of India provides a tax holiday to companies engaged in renewable energy generation or distribution.

    During this period, companies are exempted from paying income tax on profits derived from such activities.

    They can claim this exemption for any 10 consecutive years within a 15-year period starting from the year of operation commencement.

    This incentive greatly enhances the financial viability of renewable energy projects.

    State benefits

    Additional incentives by state governments

    Besides the central government incentives, many state governments in India provide extra benefits to encourage green energy within their regions.

    These can range from land cost subsidies, lower electricity duty rates for power produced from renewables, or even direct financial support during project setup.

    Every state has its own unique policies to draw investment into sustainable tech.

    Facebook
    Whatsapp
    Twitter
    Linkedin
    Related News
    Latest
    Finance

    Latest

    'No firing or aggressive action': India after talks with Pakistan   Indian Army
    'Every terrorist now knows price of removing sindoor': PM Modi Narendra Modi
    Amazon-backed supermarket chain More Retail eyeing ₹2,000cr IPO in 2026 Initial Public Offering (IPO)
    Carlo Ancelotti appointed as Brazil head coach: Details here Carlo Ancelotti

    Finance

    Understanding Credit Information Reports in India Lifestyle
    Navigating prepayment benefits for home loan borrowers Lifestyle
    Decoding personal loan insurance for Indian borrowers Lifestyle
    Leveraging off-season travel for budget vacations in India Lifestyle
    Indian Premier League (IPL) Celebrity Hollywood Bollywood UEFA Champions League Tennis Football Smartphones Cryptocurrency Upcoming Movies Premier League Cricket News Latest automobiles Latest Cars Upcoming Cars Latest Bikes Upcoming Tablets
    About Us Privacy Policy Terms & Conditions Contact Us Ethical Conduct Grievance Redressal News News Archive Topics Archive Download DevBytes Find Cricket Statistics
    Follow us on
    Facebook Twitter Linkedin
    All rights reserved © NewsBytes 2025