Understanding Section 50A: Calculating Short-Term Capital Gains on Depreciable Assets in a Block of Assets Without Indexation.

Section 50A of the Income Tax Act outlines the computation of capital gains for depreciable assets. When a capital asset is part of a block of assets with allowed depreciation, short-term capital gains arise if the total sales consideration exceeds the sum of related transfer expenses, the written down value (WDV) of the block at the beginning of the year, and the cost of any new assets acquired. If a block ceases to exist because all assets are transferred, short-term capital gains are calculated similarly. Depreciable assets result in short-term gains without indexation, applicable when the entire block or some assets are sold exceeding the block's value.