Single phase transformerless inverters are widely being adopted for small scale grid connected PV systems due to their high efficiency, lower cost and high power density. However, leakage current is the main concern in these inverters which needs to be addressed carefully. Moreover, PV inverters should also be capable of injecting a definite amount of reactive power into the grid as prescribed by the international regulations. In this paper, an improved H6 common mode voltage (CMV) clamped topology with modified modulation strategy is proposed. The proposed topology offers low loss ac side decoupling, complete elimination of leakage current via CMV clamping and reactive power generation capability. The proposed modulation technique facilitates the flow of current in order to generate zero voltage state during negative power flow. Total harmonic distortion (THD) of injected grid current at various solar irradiance levels is also analyzed. Moreover, implementation of inverter control algorithm in real time digital simulator (OP-5600) has been discussed in detail. In order to justify the suitability of the proposed topology for grid-tied PV system, simulations have been carried out in Matlab/Simulink environment and validated through an experimental setup. (C) 2017 Elsevier Ltd. All rights reserved.