Conversion of Stock in Trade (Shares) into investment

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Pawan Tirthani (Querist)
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26 March 2010 Dear Sir,

Please let me know that whether can I convert stock in Trade (Shares) into Investment and treat the profit as long term or short term capital gain. Till Last year I use to compute share transaction under PGBP.
Please reply to this querry as soon as possible.

Thanks.

Rahul Gupta

Rahul Gupta (Expert)
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26 March 2010 Shares can be converted from Stock in Trade to investments, however the value of the shares on the date of conversion will be deemed as sale value of stock in trade and the amount of profit will be Business profit and not Capital gain.

After the conversion when you sell these shares then the profit on such sale will be calculated by dedcuting the cost of shares on the conversion date from the sales value and that will be treated as short term or long term Capital Gain.