According to a report on Tuesday, as part of the Modi government's revamping of direct tax legislation, a potential hike in capital gains tax is envisaged for top income earners.

India taxes income up to 30%, however profits on some asset types, such equities funds and stocks, are taxed at a lesser rate.

"A panel may be appointed to build on proposals submitted to the Finance Ministry in 2019 with an eye to implement in 2024, though no final decisions have been made," reported Bloomberg citing sources.

To attract companies wishing to move their operations out of China amid rising tensions between Washington and Beijing, the government is also attempting to replace India's cumbersome tax structure with a simpler law through the implementation of a new direct taxation code. In addition, following businesses like Vodafone Group Plc and Cairn Energy Plc have contested tax judgements in court, it would boost India's reputation as a desirable investment destination.