capital gains

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vignesh srinivasan (Querist)
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11 May 2011 sir

1.when personel asset is converted in to business (ex:gold) we need to pay capital gain tax?

2.What is the position when asset(gold ornaments)received as gift converted in to business?

3.if instead of gift the same is accepted as loan in kind from mother/father what is the position?should this also attract CG?

CA J KUMAR

CA J KUMAR (Expert)
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11 May 2011 yes, we need to pay capital gain tax deeming the market value on the date of conversion of the assets as sale consideration.
2. cost of the assets will be the cost of previous owner in second case.