Capital Gain
When you sell an investment and make more than you paid for it, that profit is known as capital gain. In mutual funds, the managers sell securities within the fund for a profit, those profits are distributed to the investors as capital gains. These gains will be taxed, depending on factors like how long the investment was being held.
Disclaimer: Mutual Fund investments are subject to market risks. Please read all scheme related documents carefully before investing. Past performance is not an indicator of future returns.