India, July 27 -- The phrase "Tax Terrorism" has been part of India's financial vocabulary for over a decade. It typically referred to retrospective amendments, prolonged litigation, aggressive tax demands and uncertainty that often discouraged investors. But there is another side to this story that deserves equal attention.

For years, India's tax laws also contained several loopholes that enabled investors and institutions to significantly reduce-or in some cases eliminate-their tax liabilities. While many of these structures were perfectly legal under the prevailing law, others gradually evolved into aggressive tax avoidance or outright evasion. The government's response over the last decade has been to close these gaps while simultane...