taxation

 if on the present date the indexed cost of asset is 100, the fair value of asset is 120, the fixed asset is converted into stock in trade and then sold at 80 what is the capital gain and what is the business loss?

Replies (3)

(120- 100) =20 will be the capital gain and (100-80) = 20 will be the profit from business......................

with due respect to first reply, i would like to tell you that

capital profit= fair value of assets on date of conversion - indexed cost of acquisition

                       =  120-100= 20 will be capital gain long term

but u will incure a business loss. u have sold the assets at 80 and u r cost would be the fair market value at which u have converted fixed assets into stock in trade

so business loss 80 - 120 = 40

 K thank you very much for the reply.

I was confused when i read the the reply given by sandeep

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