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Capital gain on asset converted into stock in trade

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17 April 2024 A firm converted its capital asset being land which was acquired in the F.Y. 2015-16 for Rs.47 lacs into stock in trade on 01.04.2021 at the Stamp Duty Value being Rs.205 lacs. Later, a layout plan was approved, development was completed in FY 2023-24 and the land was diverted and sold as developed plots. Around 40 percent of plots were sold during the FY 2023-24.
Till the FY 2021-22 the accrued capital gain shall be taxed as Long-Term Capital Gain but shall be taxable in the FY 2023-24 with indexation upto FY 2021-22 only, on the plots sold during this year. How such income/transaction shall be filled up in ITR 5. Please guide. Thanks
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CA R SEETHARAMAN

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CA R SEETHARAMAN (Expert)
17 April 2024 Consider long term capital gains sale value as 40% of 205 lacs and consider indexed cost till the date of conversion on 40% of 47lacs.
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