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This normally happens in cases when a business owns some Fixed Assets and Later it starts business of selling them, hence that fixed asset becomes its stock in trade.

Capital Gain

=FMV (Fair Market Value)

Less

COA (Cost of Acquisition)

Also PGBP Income will be

Sales price (Full Value of Consideration)

Less

FMV 

 

Conversion of a capital asset into Stock In Trade  - Special Cases

 

Example

Suppose a person purchases jewellery on 15 July for business for Rs 200000

.Later on  in August 20,he starts jewellery business.FMV of Jewellry on that date was 240000

On 18 Sep,he finally sells jewelley for Rs 250000

View Answer
  1. Income Tax
  2. Income from Capital Gains
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CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 8 years. He provides courses for Practical Accounts, Taxation and Efiling at teachoo.com .
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