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FB 2018 - Capital gains in case of item of inventory converted into capital asset.

FB 2018 - Capital gains in case of item of inventory converted into capital asset. - Budget - By: - CA DEV KUMAR KOTHARI - Dated:- 5-2-2018 - Related provisions: S.2, 28, 45, 49, 50 of the Income-tax Act, 1961 Related article: FB 2018 - S.28 - CONVER .....

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et value (FMV) on date of such conversion or treatment will be treated as business income. Such FMV and date of conversion of treatment shall be considered the cost of acquisition and date of acquisition as per proposed amendments in S. 2.24, 28 and .....

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not realized. If such income is taxed, it will mean that the assessee has made profit out of his book entry. However, taxing income at the time of actual sale as business income , and capital gains both, asper computation shall be justified. In case .....

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set ( after conversion) is actually sold or transferred. In case such assets form part of block of assets on which depreciation has been allowed, then capital gains shall be computed according to concept of block of assets. From THE FINANCE BILL, 201 .....

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ted, namely:- (xiia) the fair market value of inventory referred to in clause (via) of section 28; ; (ii) in clause (42A), in Explanation 1, in clause (i), after sub-clause (b), the following sub-clause shall be inserted, namely:- (ba) in the case of .....

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after clause (vi), the following clause shall be inserted, namely:- (via) the fair market value of inventory as on the date on which it is converted into, or treated as, a capital asset determined in the prescribed manner; . 18. Amendment of section .....

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ause (via) of section 28, the cost of acquisition of such asset shall be deemed to be the fair market value which has been taken into account for the purposes of the said clause. . Rationalisation of provision relating to conversion of stock-in-trade .....

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capital asset, the existing law does not provide for its taxability. In order to provide symmetrical treatment and discourage the practice of deferring the tax payment by converting the inventory into capital asset, it is proposed to amend the provi .....

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