Bern/New Delhi, May 18 (PTI): Switzerland today started the process for an ordinance to put in place a mechanism for automatic exchange of tax information with India and other countries.

As part of global efforts to curb flow of illegal funds in the financial system, Switzerland has agreed to be part of the automatic tax information exchange framework.

The Swiss Federal Council today initiated the consultation on the ordinance on the International Automatic Exchange of Information in Tax Matters (AEOI act).

The consultation process will be on till September 9.

In a release, the Swiss government said the ordinance contained the Federal Council's implementing provisions for the Federal act on the AEOI act.

"The ordinance mentions in particular other non-reporting financial institutions and exempt accounts, and regulates details with regard to the reporting and due diligence requirements for reporting Swiss financial institutions," it said.

Besides, the ordinance has provisions that are required to implement the automatic exchange of information, including implementing provisions on the tasks of the Federal Tax Administration.

Having an automatic tax information exchange mechanism with Switzerland will help India in its clampdown on illicit fund flows.

Both countries have stepped up their co-operation on tax matters related to black money allegedly stashed by Indians there.