Capital gain

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subodh

subodh (Querist)
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13 March 2015 how to convert capital asset(land) into stock and what would be the cost to be considered of the stock?

CS Advocate Abhishek Goyal

CS Advocate Abhishek Goyal (Expert)
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13 March 2015 You can convert capital asset into stock in trade by making entry in your books of account. But beware of provisions of section 45(2)wherein any conversion of capital asset into stock in trade will be treated as transfer in the year of conversion itself and taxability of capital gains arises in the year in which this converted stock is sold. For computation of which fair market value of asset as on the date of conversion is taken as the full value of consideration and simultaneously business profits are also calculated.

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