This time while Indian stock market seems to be at the trouble, each time blinking with a quick up and down change in form of value of rupees against dollar, there are at least three issues that are related with Indian equities and necessary for investor.

First most is linked with the implications of the new general anti-avoidance rules (GAAR) for foreign institutional investors (FIIs).

There is a big hurdle for brokers even for FII that what should be the procedure of financial transaction from April 1 onwards as during the Budget revised norms, the income tax authorities “looking through” the P-note supplier and testing the tax residence of the end investors.

No one know what steps should be regard the tax transaction whether should be deducted at source at 15 per cent or not. And for this undetermined information some brokers with a Mauritius entity, in fear of increase tax exposure, are stopping all participatory-note (P-note) transactions.

Problem for brokers, who are issuing the P-notes from abroad, is how they will attract tax, how these investors view India for trade transactions and this reasoned of unclear tax provisions.

Beside Brokers, Funds issuers who have their own licence are also in a big threat over tax residence. The main problem is if Investors in these funds now paying a 15 per cent tax on short-term gains, it will be apparent in 2014-15. Then how one could calculate account value as the net asset value (NAV) that decreased high return expectation.

It reduces the chances of in futures and options for international investors that would impact liquidity position of market. Even it is also expected to end the issuers under FII, if any go further for accessing India for global trade investment.