The returns on your investment are taxable at your marginal rate of taxation. There are two broad ways to arrive at the Taxable Income

1. Profit and Gains of Business or Profession (PGBP)

2. Profit and Gains of Business or Profession (PGBP- Presumptive) 

PGBP Method - In this method, one needs to identify three things - Business Income, Business Expenses, and Profit: 

1. Business Income - The monthly rentals you earn are considered as the business income.

2. Business Expenses - Since you own the assets ( in your name), you can claim depreciation as an expense.

3. Profits - Profit is calculated by doing a subtraction of Business Income and Expenses i.e. Business Income MINUS  Expense 

PGBP Presumptive Method - One can choose presumptive taxation for income earned through leasing from solar projects per Section 44AD of the Income Tax Act. To do so, one needs to fulfill these requirements: 

• The Person should be a resident of India (NRI/ NRO can’t opt for this)

• Turnover Limit-The total amount earned through lease rent should not exceed Rs Two  Crore per annum

 Similar to the previous method, the rentals you earn is considered as the business income.

Arriving at taxable income: 

PGBP Method - Profits calculated are considered taxable income.

PGBP - Presumptive Method - Flat 6% of the Business Income calculated above is considered as the taxable income.

The investor has to pay income tax on the taxable income calculated above as per the tax slab rate they fall under.

The tax laws keep changing and you should seek expert advice before arriving at a decision.