Capital Gains Accruing u/s 45(2)

This query is : Resolved

CA Sanjay Baheti (Querist)
Follow

23 June 2010 Section 45(2) of the Income Tax Act...... Conversion of capital asset into current asset. The capital gain arises at the time of actual sale of shares. The assessee has sold shares in the market and STT has been paid. Two kind of incomes accrue to the assessee. Long term capital gain u/s 45(2) and business income on sale of shares. The query is whether such long term capital gain qualifies for exemption u/s 10(38)?

CA Kalpesh Gokani

CA Kalpesh Gokani (Expert)
Follow

25 June 2010 Yes such long capital gain qualifies for exemption u/s 10(38). Please note period between acquisition of shares and their conversion in stock-in-trade i.e. current asset is more than 12 months.