The idea of capital gains is nothing new. It is one of the principal sources of income like salary, interest, rents, profits etc. How do capital gains arise? When you buy assets like furniture, machinery, bonds, equities or even property, you make a profit or loss when you decide to sell these assets. When any asset is sold at a profit (selling price is more than the cost price) it results in a capital gain. On the other hand, if it is sold at a loss (selling price is less than the cost price) then it results in a capital loss. That sounds so simple but from a taxation point of view it is a lot more complicated.