The only two bonds you can invest in are issued by Rural Electrification Corporation (REC) and National Highways Authority of India (NHAI). These bonds are locked in for three years and carry interest rates of around 5-6%. (The interest, though, is taxable) Too little, you say? You're saving 20% on cap gains tax now, which is more than the amount you lose on the interest.
Anyhow, Samarth found in May that there were no more bonds available. Both REC and NHAI had closed their offers of 2007-08, and hadn't opened new ones. He found that around May 26, NHAI started the next series of bonds, and posted me a mail - so here you go:
All kinds of long term capital gains can be parked here - i.e. real estate, gold, debt funds etc.