India, July 12 -- If you've recently sold a property and are looking to preserve capital while reducing your tax liability, 54EC bonds could be an option. These tax-saving instruments offer exemption from long-term capital gains (LTCG) tax under Section 54EC of the Income Tax Act, 1961.

Designed specifically for reinvesting capital gains, 54EC bonds are a popular choice for those looking to protect profits and avoid hefty taxes after selling real estate or other long-term assets. Experts say they're suitable if you're comfortable with low returns, capital protection, and a lock-in period.

"These bonds are issued by specified institutions, such as the National Highways Authority of India (NHAI) or the Rural Electrification Corporation (R...