The Comptroller and Auditor General (CAG) will conduct a special audit of departments belonging to the Ministry of Defence and the Ministry of Railways this year, to find out if there is leakage in the tax deducted at source (TDS).
The departments in the two ministries together spent around Rs 1,50,000 crore in 2006-07, but the amount of TDS deducted was only Rs 900 crore.
Either there are irregularities in the departments accounts or many of them are not deducting TDS, an income-tax official said.
Of the Rs 75,000 crore collected in 2006-07 through TDS, only Rs 1,800 crore was amassed from all departments of central government ministries.
Departments are obliged to deduct TDS from expenditure towards salaries, maintenance contracts, works contracts and ads. The I-T department is concerned over the general declining trend in filing of TDS returns, and collections as a proportion of total direct tax collections.