When the selling price of an asset is greater than the purchase price, it results in capital gains. However, this gain is realized only when the asset is sold. Capital gains can either be long term (more than one year) or short term (lesser than one year). Long term capital gains are taxed lesser than short term capital gains to encourage investment and entrepreneurship. As per the current Indian tax laws, long term capital gains from investment attract no tax.
peakalpha Answered question May 10, 2020