Entities required to deduct tax while making payments could face a close scrutiny of their returns by the income-tax department as it gears to check payment defaults and boost collections.

The I-T department is contemplating scrutinising TDS returns on the lines of income tax and corporate tax returns to ensure that those required to deduct tax at source are complying with the rules and depositing due taxes.

Enhancing collections from TDS is one of the focus areas for the I-T department, a department official said. The fact that collections rose to more than Rs 1,50,000 crore in 2009-10 as compared to Rs 70,689 crore in 2006-07 and now contributes nearly 40% of the total tax collections itself explains why the tax authorities are eyeing it as a focus area.

The proposal, a part of the road map to strengthen the regime for TDS, figured at the annual conference of the chief commissioners and director generals.

Scrutiny assessment usually involves a detailed examination of the returns filed so as to check the veracity of the claims, while normal assessment is cleared on the face value of the assessments. At present, selection of returns for scrutiny is computer-based.

A closer scrutiny of the returns could help the department catch hold of those who have failed to deduct tax while making payments.

The tax authorities have already begun to carry out extensive surveys to catch TDS offenders. A total of 8,828 surveys and inspections were carried out last fiscal.

The I-T department had found a number of organisations, including some within the state sector as well, that deducted tax but did not deposit it with the department. In some cases it was also found that deductors were deducting tax at a lower rate.