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I got this from somebody so please check for accuracy...

India's new tax code and rules affecting travel to India for NRIs...
INDIA'S NEW TAX CODE TO HIT NRIs BADLY

The 48-year-old Indian Income Tax Act is being replaced by a new Direct Tax Code from April 1, 2011. The provisions of the new Tax Code will have a substantial impact on NRIs who own property and stocks. In the case of property, elimination of tax deductions and the presumptive rate of taxation will adversely impact potential investors.

The new Direct Tax Code is expected to tax:

1. Income (including Non-Resident Ordinary interest) at a flat
rate of 20 per cent without even the shelter of the basic exemption limit.

2. Hitherto fully exempt long-term capital gains on equity and
equity mutual funds at a flat rate of 30 per cent.

3. Aggregated capital gain income at a flat rate of 30 per cent. (Indian residents, however, will pay 30 per cent tax on capital gains only if such gains are above Rs 25 lakh. This tiered system of tax is not available to NRIs under the Direct Tax Code.)

Under the Direct Tax Code, most NRIs and investors in property will pay heavy price for buying property in the motherland. They will pay tax on the higher of the actual or 'presumptive rent' for let out or deemed let out properties. (Presumptive rent, a new concept under the Direct Tax Code, has been fixed at 6 per cent of the rateable value stipulated by the local authority. Where no rateable value has been fixed, 6 per cent shall be calculated with reference to the cost of construction or acquisition of the property.)

For example, a tenant pays rent of Rs 25,000 per month on a property that costs Rs 1 crore (Rs 10 million). The annual rent of Rs 300,000 is 3% of the property cost. Under the new Tax Code, the landlord will have to pay tax as if he is receiving Rs 600,000 (6 per cent of a Rs 1 crore). If the property lies vacant, tax will still be payable for the presumptive rent. Currently,
one of the key attractions of India is a tax-friendly capital market system. If this is taken away, there is no gauging the extent of collateral damage that will take place.

NEW RULES ARE AFFECTING TRAVEL TO INDIA

Britain and the US have lodged diplomatic protests against the proposed changes to India's visa rules that bar tourists from returning to the country within two months of a visit. The new rules will also apply to Person of Indian Origin (PIO) card holders. The change in the visa rules are said to be in response to the case surrounding suspected terrorist David Headley, who made nine visits to India on a multi-entry business visa. The decision to change the visa was under the directive of the Home Ministry.

It's not be effective from April 2011, appears like India Govt wants to think about it more.
http://www.business-standard.com/runup10/storypage.php?autono=385461