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)


COA (Cost of Acquisition)

Also PGBP Income will be

Sales price (Full Value of Consideration)




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



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

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CA Maninder Singh is a Chartered Accountant for the past 13 years. He also provides Accounts Tax GST Training in Delhi, Kerala and online.