The government will examine demands for rationalising taxes on equity investments, but is not considering any knee-jerk response to stem foreign institutional investor (FII) outflows from Indian equity markets, a senior Finance Ministry official told The New Indian Express. “There is a need for a deeper study of the taxation of capital gains from equity investments,” the official said, acknowledging that there are currently divergent views on the issue. The official was responding to a question from TNIE on why the government chose to provide tax relief on investments in government bonds by foreign investors while leaving unaddressed the long-standing demand for lower capital gains taxes on equities.