RBI's Digital Rupee will help curb black money menace: Finance Ministry

The proposed digital rupee to be issued by the Reserve Bank of India (RBI) starting from the next financial year will not only give a boost to the digital economy but also help curb the menace of black money, a senior finance ministry official said.

Talking to ANI, the official said the RBI will have each and every trail of the digital rupees.

"If you buy something from a shopkeeper and pay through digital money and that digital money is used to pay to his vender by shopkeeper, RBI will have all the data of transaction done with the digital rupee," the official said.

The official pointed out that black money proceeds are usually received in cash from underground economic activity and, as such, are not taxed, but if RBI has the transaction trail of every digital rupee then it will be difficult for a person to evade taxes.

Announcing the introduction of the digital rupee Finance Minister in her Budget speech said that, the introduction of Central Bank Digital Currency (CBDC) will give a big boost to the digital economy. Digital currency will also lead to a more efficient and cheaper currency management system.

Finance Minister has announced one new provision 'Deterrence against tax-evasion' in Union Budget 2022-23 to curb black money. Sitharaman said, "Presently, there is ambiguity regarding set off, of brought forward loss against undisclosed income detected in search operations. It has been observed that in many cases where undisclosed income or suppression of sales etc. is detected, payment of tax is avoided by setting off, of losses. In order to bring certainty and to increase deterrence among tax evaders, I propose to provide that no set-off, of any loss, shall be allowed against undisclosed income detected during search and survey operations. "

Explaining this new provision to ANI, JB Mohapatra, Chairman, Central Board of Direct Taxes (CBDT), said, "This has been introduced in the finance bill as a new provision called 79A. This is basically to prevent people from setting off the undisclosed income. This denial of set-off, of brought forward losses will have a beneficial effect on punishing those who deserve to be taxed in respect of the undisclosed income which they had not declared earlier."

Talking about the need of this new provision CBDT Chairman said, "This is a realisation that the provisions of the search assessment are being used in a manner which was never the intent of legislature. The legislature was to tax the undisclosed income, it was never meant for setting off undisclosed income."

(ANI)