Tax experts say 30-40 per cent of them, registered as trusts, could be affected by the new rules.
FPIs pulled out money from equity markets for five of the six sessions following the Budget, which was presented on July 5.
FPIs get covered by higher tax rate as they have been investing as a non-corporate entity such as trust or association of persons.
There is a need to manage the risks associated with overseas sovereign borrowings, said CEA K V Subramanian.
As per latest data, FPIs withdrew amount of Rs 3,710.21 crore from equities but invested Rs 3,234.65 crore in the debt.
Finance Minister Nirmala Sitharaman in the Budget for 2019-20 proposed easing KYC norms for foreign portfolio investors.
So far in 2019, the FPIs have invested a net cumulative amount of Rs 87,313.22 crore since January, the data showed.