TaxTMI 
TaxTMI 
Conversion of stock in trade into capital asset
X X X X Extracts X X X X
X X X X Extracts X X X X
....onversion of stock in trade into capital asset<br> Query (Issue) Started By: - manoj gupta Dated:- 29-6-2010 Last Reply Date:- 7-7-2010 Income Tax<br>Got 3 Replies<br>Income Tax<br>Dear Sir, thanks for the reply. But my question is reverse. It is about conversion of stock in trade into capital asset and not capital asset into stock in trade. what are the provisions for conversion of stock in trade....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... into capital asset. what sections of income tax govern this. Reply By Sharad Aggarwal: The Reply: When you convert stock in trade into capital asset there is no tax effect i think. Only when you sell this asset finally, you would have to pay capital gains . The period of holding would be counted from the time of the original date when you bought the asset as stock in trade. Sharad Reply By Rama....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Krishana: The Reply: Refer the provisions of sub section 2 of section 45. Sectin 45(2) read as, ".......the profits or gains arising from the transfer by way of conversion by the owner of a capital asset into, or its treatment by him as stock-in-trade of a business carried on by him shall be chargeable to income-tax as his income of the previous year in which such stock-in-trade is sold or otherw....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ise transferred by him and, for the purposes of section 48, the fair market value of the asset on the date of such conversion or treatment shall be deemed to be the full value of the consideration received or accruing as a result of the transfer of the capital asset" Reply By Rama Krishana: The Reply: In addition, Mr. Dev Kumar Kothari has addressed your issue correctly. He has answered you two qu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....estion specifically. But, it happens that we need everything readymade without spending a minute on the whole issue.<br> Discussion Forum - Knowledge Sharing ....