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India forms panel to resolve tax dispute with foreign investors

[NEW DELHI] India has set up a panel to suggest ways to resolve a tax dispute with foreign investors, Finance Minister Arun Jaitley told lawmakers in the upper house of parliament on Thursday.

Foreign portfolio investors are upset over the Indian tax department's attempts to claw back tax it says is owed on years of previously untaxed gains, which has prompted a sell-off in India's share and bond markets.

Uncertainty created by the minimum alternate tax being demanded from some overseas funds led to the biggest single-day sales of Indian shares and bonds by overseas funds in 1-1/2 years on Wednesday.