What causes emotions? I have absolutely no knowledge of psychology. But I am wondering what causes emotions in human? Emotions such as happiness, sadness, love, hate etc. Is there some sort of hormones responsible for this? How does brain understands this?
Let's break this down into two terms: affect and emotion.  

Affect

Affect corresponds to two dimensions that underlie emotional experience: valence and arousal. 


Valence - feelings of pleasantness and unpleasantness 
Arousal - feelings of activation (e.g., alert, energized) and deactivation (e.g., de-energized, sleepy)


So what are the sources of these two basic sensory dimensions? 

One answer is... immunologic, metabolic, and autonomic changes in the body, whose sensory input flows up and is processed by primary interoceptive cortex (posterior insula) (Barrett &amp; Simmons, 2015).  Think of the body as a source of sensory input, just like any other modality (visual, auditory, etc.).

Additionally, there are top-down predictions descending from agranular interoceptive cortex, which are actually responsible for most of our interoceptive sensations (i.e., conscious affect).  That is, most of your affective feelings are produced by top-down predictions about input from the body rather than bodily input itself.  Weird!

Another part of the answer is... endogenous opioid and cannabinoid signals in certain "hotspots" of the brain (e.g., nucleus accumbens, ventral pallidum), which are thought to mediate pleasure (Berridge &amp; Kringelbach, 2013).

But in general... this is still being figured out.

Emotion

The answer to this part depends on your theory, about which I'll be very brief.

Basic emotion theorists (e.g., Ekman &amp; Cordaro, 2011) argue that emotions correspond to discrete, circumscribed parts of your brain (e.g., the amygdala and fear, the insula and disgust).  We have "affect programs," that when activated, produce a discrete emotion (fear, anger, etc.).

Constructionists (e.g., Lindquist et al., 2013) argue that emotions are essentially interpretations of your affect (valence and arousal) in a given context.  So "fear" is just a concept that you deploy in certain situations (e.g., when you feel negative, highly aroused, and are running from a bear). On this view, emotions emerge from interactions among distributed brain networks that are involved in more basic psychological processes (e.g., exteroception, interoception, conceptualization, language).

The meta-analytic evidence seems to favor the latter view, but there's still a buttload of work to be done on this end.

As far as controlling emotions--well, that's an entirely different question.  But see James Gross for more info.