Conversion of land held as stock in trade to investment

[satbir singhwahi]

Mr A is trading in land , and land is held as stock in trade. This practice is done since last 20 years. Now during FY 2025-26 , wants to convert stock of land as fixed assets to claim ltcg in future year sales. When taxability will arise in Fy 2025-26 or when sale made in tax year 2028-29

AI Summary

Conversion of stock in trade into investment raises the issue of when taxability arises on later land sale. Treatment of land originally held as stock in trade when converted into investment or fixed asset is discussed. The issue is whether taxability arises in FY 2025-26 on conversion or later, when the land is sold in tax year 2028-29. The focus is on timing of taxability after conversion from trading inventory to capital asset and the character of gain on subsequent disposal.