Tax Benefits as Incentives for Sustainability Practices Beyond Core Business Operations

Tax Benefits as Incentives for Sustainability Practices Beyond Core Business Operations

Vinoth K*, Tamilnesan V*, Thirumalesh C M*, Vandana K*, Wazid Hussain*, Gokul Kumar H*

*Vinoth K, Tamilnesan V, Thirumalesh, Vandana K, Wazid Hussain, Gokul Kumar H, Students, MBA 2025-27 batch, Faculty of Management Studies CMS Business School, JAIN (Deemed-to-be-University), Bengaluru

ABSTRACT

The sustainability agenda in India is also becoming more and more associated with providing tax breaks on the implementation of sustainability measures beyond its primary business, including the investments into renewable energy, waste management, and circular economy solutions. The fiscal tools are deductions, credits, and accelerated depreciation to correct the corporate behavior and promote national goals concerning climate change. Such incentives are not fully being used because of the high compliance costs, lack of awareness and increased preference towards simplified tax regimes though they are available. The gap existing between the design and real implementation of sustainability-linked tax benefits of Indian firms will be covered in this paper. Moving to the more behavioral and strategic aspects of corporate sustainability implementation, the article writes about a technical analysis of the design of the tax provisions, which also deals with accountability and greenwashing issues.

This paper is a descriptive and conceptual comparative research, which will use secondary collected government policy documents, academic sources, international best practices and international ESG models, including GRI, SASB, and TCFD. This kind of analysis will examine the interaction of fiscal incentives with institutional forces, stakeholder expectations and reporting systems, in addition to assessing the inclusion of carbon credits under the Indian tax system.
The present research provides its input to the literature by an assessment of sustainability-linked tax incentives based on a theory in the environment of an emerging market. The reason is that any efficient fiscal policy must be very careful in balancing administrative simplicity and outcome-based accountability and alignment to ESG standards so as to create actual corporate participation in the realization of long-term sustainability outcomes consistent with the India Net Zero 2070 target.

Keywords: Tax benefits, sustainability practices, Indian fiscal policy, ESG frameworks, carbon credits, greenwashing, business sustainability