P-Notes news , which allows indian and foreign investor to worry .

A basic definition of Participatory Notes commonly known as P-Notes or PNs are instruments issued by registered foreign institutional investors (FII) to overseas investors, who wish to invest in the Indian stock markets without registering themselves with the market regulator, the Securities and Exchange Board of India - SEBI.

Now who is FII here , Individuals and corporates can no longer buy P-notes, only regulated investors - like funds, asset managers and brokers whose names are disclosed to Sebi every month - are allowed to trade. Notes change hands with the consent of P-note issuers .

So it is all about P-Notes trade and respective  capital gains . 

This time around the triggers are different — at a time when India is renegotiating the treaty with the tax haven, a former minister of Mauritius hinted that the treaty has lost its meaning; the second trigger - and this rattled the market — are the simplistic suggestions of a panel to curb black money. Given the government's obsession about black money and Swiss accounts, Dalal Street punters feared trading in P-notes could be banned. 

The man in Mauritius said his country would lose the right to tax capital gains (CG). If true, it means the end of Mauritius as we know it. How? The treaty says that India cannot tax the CG of investors from Mauritius; only Mauritius can. Since there is no CG tax in Mauritius, these investors pay no CG tax in either country. That's the beauty of Mauritius. So, if Mauritius gives up the right to tax, it means India could end up taxing foreign investors on their short-term CG in the stock market. 

The demise of Mauritius as a tax haven would also mark the end of Singapore — another country that has signed a similar treaty with India — as a destination for fund managers investing in India. The rules are clear —if investors from Mauritius are taxed in India, so will be the ones coming from Singapore. 

It could allow indian tax revenue to gain but investment to getting failed. They have to spend some money every year to claim tax benefit in india . 

Final call is getting real truth of black money , many options our govt. is going to take . But investors says , we all do not have black money then why are you hurting FII sentiment by giving them tax mandate and making our market looks bad .Whenever the news of P-Notes / Unnessasry Tax hikes / Minimum alternate tax news will arrive in news , we will have fall in Indian markets.