Capital gains on conversion of capital assets into stock-in-trade are taxed using fair market value and sale timing rules. Capital gains arise on conversion of a capital asset into stock-in-trade, including cases where the asset is treated as stock-in-trade without formal conversion. The fair market value on the date of conversion is deemed to be the consideration, and the gain is taxed when the stock-in-trade is sold or otherwise transferred. Under the earlier regime, capital gain is computed with reference to fair market value on conversion, while business income is computed on the sale price of the stock-in-trade.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Capital gains on conversion of capital assets into stock-in-trade are taxed using fair market value and sale timing rules.
Capital gains arise on conversion of a capital asset into stock-in-trade, including cases where the asset is treated as stock-in-trade without formal conversion. The fair market value on the date of conversion is deemed to be the consideration, and the gain is taxed when the stock-in-trade is sold or otherwise transferred. Under the earlier regime, capital gain is computed with reference to fair market value on conversion, while business income is computed on the sale price of the stock-in-trade.
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