New Delhi, July 27 -- When you sell property or assets and make substantial capital gains, your instinct is to minimise the tax you'll pay. One instrument that can help with this is a capital gains bond, also known as 54EC bond, which offers a tax exemption on long-term capital gains if bought withing six months of selling the asset.

These bonds, named after Section 54EC of the Income Tax Act, 1961, are issued by government-approved entities such as Power Finance Corporation Limited (PFC), Indian Railways Finance Corporation Limited (IRFC), and Rural Electrification Corporation (REC). However, with a fixed return of 5.25% and a five-year lock-in, are they the best use of your money?

If you can earn an annual return of more than 8% elsew...