Conversion of capital asset in to stock in trade
- Conversion of capital asset in to stock in trade conversion of capital asset into stock in trade is treated as transfer and capital gain shall arise where an assessee convert capital asset into stock in trade.
- Capital gain shall be taxable in the year in which such stock in trade is sold.
- If any part of stock in trade is sold then only part of capital gain shall arise in the year in which part of stock in trade is sold.
- For the purpose of claiming exemption U/S 54EC the period of 6 months shall be calculated from date of sale of stock.
The following manner the capital gain and business income is calculated:
Capital Gain
| Fair Value Of Consideration | XXXX |
| Less: Cost of Acquisition | (xxx) |
| Short Term Capital Gain/ Long Term Capital Gain | XXXX |
NOTE- FMV as on date of conversion is the Fair Value of Consideration.
Profits or Gain from Business or Profession
| Sale Price of Stock In trade | xxxx |
| Less: FMV of Asset on date of conversion | (xxx) |
| PGBP Income | xxxx |
