Explained: Will tax on the rich hit foreign investments in India?

The government's budget proposal earlier this month to increase taxes on those with annual incomes of more than Rs 2 crore ($292,269) has rattled many foreign portfolio investors(FPIs). The realisation that the new tax likely applies to the trusts through which many foreign investors put money into Indian financial markets sent stocks plunging last week.

Now, their advisors say the investors are threatening to pull funds from India unless rules are amended so that they won't take a tax hit. Here are some facts about the.

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