Fixed assets to stock in trade

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

27 October 2012 A Pvt Ltd. a property on dated 06/01/2012 as fixed assets.

Now company wish to convert property to stock-in-trade.

What is tax implications, when for property conversion from fixed assets to stock-in-trade.

Anand Modi

Anand Modi (Expert)
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27 October 2012 Firstly find the date and amount at which the company convert its Fixed Asset in to Stock.

Then find the Capital gain whether Long term or short term (If depreciation is claimed it is always short term gain only).

when the converted stock is sold out you will have to deduct from your selling price the amount at which you transferred the property from Fixed Asset to Stock in Trade.

You will be liable to tax for capital gains when the stock is sold and not when you decided to convert fixed asset into Stock in trade.

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