Impact of capital gain - sale of investment

[Ashutosh Chhawchharia]

The company has purchased 10000 shares of another listed company in the year 2002 - 2003 held it as stock in trade. On 01.04.2005, such stock in trade was converted to Investments. I want to know impact of capital gain if I sell whole of such investment on 31.03.2010. What will i consider the holding period and which year i should take the base year for calculating index cost. Whether such conversion will be treated as business income or capital gain at the time of sale of such shares.?

AI Summary

Capital Gains Tax Query: Converting Shares from Stock in Trade to Investments and Implications on Sale in 2010 A company purchased 10,000 shares in 2002-2003 as stock in trade and converted them to investments in 2005. The query concerns the capital gains implications if these shares are sold in 2010. One opinion suggests that selling long-term listed shares through a stock exchange with securities transaction tax paid exempts them from capital gains tax. If sold privately, the acquisition date and cost from when they were stock apply. Another perspective highlights the absence of provisions for converting stock in trade to capital assets, suggesting that the initial purchase date should be used for computing capital gains, claiming exemptions accordingly.