Capital Gains Tax (CGT) is levied on the profit realized from the sale of assets that have increased in value over time. When an asset is sold for more than its purchase price, the profit made (capital gain) is subject to taxation. However, there are exemptions and specific rates depending on the type of asset, the holding period, and the individual's tax bracket. In the context of cryptocurrency, trades that result in a capital gain are also subject to this tax, making it essential for investors to keep accurate records of their transactions.