Income tax here refers to corporate tax.

Taxes are paid both at corporate level and personal level.

Taxes paid at personal level fall into two catagories:personal income tax and tax on capital gains.

In most recently published textbooks, the term corporate tax has been used to refer to income tax paid by the company.

Tax on capital gains has already been clearly explained by 岸芷汀兰.

16％income tax是公司交的税，股民分红要交个人所得税，这里不关公司的事。

16％是算在营业额上的，如果你卖掉旧机器或者其他asset 卖的钱比帐面的价值高，就有capital gain，这个capitial gain不收税。

Capital gains can be interpreted in two ways.

Firstly, in project evaluation, capital gains are exactly like what 岸芷汀兰 said.

In this case, taxes on capital gains take the form of corporate tax because they are considered as a compensation for earlier reduced taxes result from the depreciation method.

In the other case, if a company pays a dividend to its shareholders, a shareholder must pay tax on the dividend. This type of tax is refered to as personal income tax on dividend.

If a shareholder realizes his/her interest by selling the shares he/she holds. The gain from selling the shares is considered as a capital gain. Similarly, tax would be levied on it, while the tax rate can be different which leads to the choice of preference faced by shareholders between dividends and capital gains.