Capital gains refer to the profit made from selling an asset, such as stocks, real estate, or other investments, for more than its purchase price. For example, if you buy a piece of property for USD 200,000 and later sell it for USD 300,000, your capital gain is USD 100,000. These gains can be classified as short-term or long-term, depending on how long the asset was held before selling. Short-term capital gains apply to assets held for one year or less, while long-term gains apply to assets held for more than a year, often benefiting from lower tax rates.