# Capital Gain/Loss on Depreciable Assets
A sale within a block of assets does NOT normally trigger capital gain. Two exceptional situations create Short Term Capital Gain (STCG) or Short Term Capital Loss (STCL):
## Situation 1: Block continues to exist BUT WDV becomes NEGATIVE
This happens when the sale value exceeds (Opening WDV + Purchases).
Treatment:
- The negative WDV is treated as Short Term Capital Gain (STCG).
- No depreciation is allowed (since there is no positive WDV to depreciate).
- The block's closing WDV becomes NIL.
## Situation 2: ALL assets of the block are sold during the P.Y.
The block ceases to exist. Two sub-cases:
### (a) If WDV of block is POSITIVE after sale
- Treated as Short Term Capital Loss (STCL).
- No depreciation allowed.
### (b) If WDV of block is NEGATIVE after sale
- Treated as Short Term Capital Gain (STCG).
- No depreciation allowed.
## Summary Table
| Situation | Block Status | WDV | Treatment |
|---|---|---|---|
| Block continues, WDV +ve | Surviving | Positive | Normal depreciation |
| Block continues, WDV −ve | Surviving | Negative | STCG; no depreciation |
| All assets sold, WDV +ve | Empty | Positive | STCL; no depreciation |
| All assets sold, WDV −ve | Empty | Negative | STCG; no depreciation |
## Key Point
Capital gain/loss on depreciable assets is always Short Term regardless of the actual holding period — because the block-of-assets concept dispenses with individual asset holding periods.