Foreign bond investors face a bill of up to $8 billion in new and retrospective taxes potentially reversing Modi's previous efforts to attract overseas investment into fixed income markets.
India's government had promised a more predictable, less aggressive tax regime, notably after the new government led by Modi came into power last May.
So foreign portfolio investors said they were shocked by local tax authorities’ move from March to levy minimum alternate tax MAT on their earnings.
Announced in 1997, MAT was levied only on India-based manufacturing companies who maintain Indian balance sheets while foreign investors were exempted.
Finance Minister Arun...