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Capital gain exemption

03 December 2011

If asses is converted into stock in trade, then is there any capital gain exemption is available for such convertion..??

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4 Replies

Jivanshu Singla (Articleship) (61 Points)
Replied 03 December 2011

when an asset is converted into SIT then there is no exemption but u need to pay tax only on sale of that SIT.

Mary Asha (Chartered Accountant) (112 Points)
Replied 03 December 2011

There is no exemption as such. But if you don't sell that stock in trade. You need not pay the tax.

CA Deepesh Ruhela (Keen to Learn) (3271 Points)
Replied 03 December 2011

capital gain on conversion of capital asset into stock-in-trade shall be chargeable to tax in previous year in which that stock-in-trade is sold or otherwise transferred by the assessee. The indexation of cost of acquisition/improvement is done upto the date of conversion.