Whenever an asset is purchased for lower value and sold for more, a capital gain or profit is made. This profit is to be taxed according to law and tax levied is known as capital gains tax.
Profit on what type of assets?
Capital assets such as shares, bonds or real estate excluding agricultural land and certain bonds.
Jewellery, paintings etc are covered under it.
What remains the proportion of tax?
Normally if you sell the capital asset after holding it for 36 months (some shares considered for 12 months) it is taxed less compared to assets you may sell it before.
Here is simplification:
Short term capital gains (STCG) = Capital asset held for less than 36 months (Taxed higher to remove speculations)
Long term capital gains (LTCG) = Capital asset held for more than 36 months (Tax rates lower comparatively)
If there is capital loss (i.e asset sold less than the purchasing value) on sale of asset, Tax authority allows to set-off this loss against any other capital gain in that particular year.