Finance minister Nirmala Sitharaman on Thursday called on the group of 20 major economies to consider bringing non-financial assets like crypto-currencies under the ambit of the automatic exchange of information mechanism among countries to curb tax evasion.
Participating in the G20 Ministerial Symposium on Tax and Development in Bali, the finance minister said investigations have revealed that tax evaders resort to numerous layers of entities to mask their unaccounted-for assets. These unscrupulous elements explore other avenues to shift their unaccounted wealth through investment in non-financial assets, she added.
The finance minister has been articulating India’s wish to gather a global strategy around cryptos for their effective regulation, as they operate in a virtual world. Her ministry is expected to soon release a consultation paper on virtual digital assets, including cryptos.
The Budget for FY23 has proposed to tax any income from the transfer of virtual digital assets at 30%. The loss from the sale of these assets cannot be set off against any other income and a 1% TDS (tax deducted at source) will also be levied on payments made on the transfer of digital assets.
“While the development of crypto asset reporting framework is underway, I call upon the G20 to examine feasibility of an automatic exchange of information in respect of other non-financial assets beyond those covered under the Common Reporting Standards (CRS) like immovable properties as well,” Sitharaman said.
Under the automatic exchange of information in respect of financial accounts, over 100 countries have committed to exchanging financial account information.
Separately, speaking at the Sustainable Finance for Climate Transition roundtable in Bali, the finance minister also highlighted the need for blended finance and harnessing private capital to realise sustainable development goals.