Capital gain bonds are special types of debt instruments issued under Section 85 of the Income Tax Act, 1961. They are offered by specific government-backed institutions and provide exemption from LTCG tax on profits made from selling immovable property—such as land, buildings, or residential/commercial real estate.

By investing your LTCG into these bonds, you can claim a full exemption from the applicable tax—provided the investment is made within the required time frame.