TaxTMI 
TaxTMI 
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
Conversion of land held as stock in trade to investment
07 Jun 2026 
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Stock-in-trade conversion of land is taxed on fair market value at conversion, with later capital gains measured from that date.
Conversion of land from stock-in-trade to a capital asset is taxed in the year of conversion on the fair market value as business income. On later sale, the same fair market value becomes the deemed cost of acquisition, and the holding period for capital gains is counted from the date of conversion. Accordingly, only the post-conversion appreciation is taxed under capital gains, subject to the prescribed long-term holding period. (AI Summary)
Conversion of land from stock-in-trade to a capital asset is taxed in the year of conversion on the fair market value as business income. On later sale, the same fair market value becomes the deemed cost of acquisition, and the holding period for capital gains is counted from the date of conversion. Accordingly, only the post-conversion appreciation is taxed under capital gains, subject to the prescribed long-term holding period. (AI Summary)