Question And Answer
Subject: capital Gain on LTCG
Querist: shubham shah
Answered by:
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Date: July 24, 2023
Query asked by shubham shah


when capital asset converted into stock in trade tax implication on gain.

understand a point of capital asset converted into stock in trade tax calculation , also here two heads tax implies one is business income and second is capital gain .
for business income the tax is accordance with slab rate when the actually stock in trade sold, and in other hand capital gain arise after indexation benefit.

here one question arise would i eligible for exemption for capital gain if i invested such money U/S 54,54F,54EC etc within 6 month from actual sale of such stock in trade.

clarify my doubt sir ASAP.

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Reference may be drawn on the CBDT Circular No. 560, dated May 18, 1990 [1990] 184 ITR St. 1 wherein it was clarified that for purposes of qualifying for a deduction under section 54E of the Act, the date of transfer is the date on which the capital asset is converted by the assessee into stock-in-trade and not the date on which stock-in-trade is sold or otherwise transferred by the assessee.

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