Amid apprehension over slowing corporation tax collections, the Central Board of Direct Taxes (CBDT) plans to increase the contribution of tax deducted at source (TDS) in the direct tax kitty from 37 per cent to 40 per cent.

A senior CBDT official said the idea was to use TDS as a major driver to meet the stiff direct tax collection target of Rs 5.33 lakh crore in the current financial year.

The official said CBDT was preparing a strategy for this.

"The TDS standing committee, which has representatives from seven-eight areas, including industry, chartered accountants and CBDT officials, is slated to meet for the first time on Monday. Its main task will be to suggest steps to increase TDS collections," he said.

The government collected Rs 1.66 lakh crore through TDS in 2010-11, 37.37 per cent of the total direct tax collection of Rs  4.46 lakh crore.

At 40 per cent, TDS will yield Rs 2.13 lakh crore if the government meets its direct tax collection target of Rs 5.33 lakh crore.

TDS collections have grown steadily in the last five years, from Rs 70,689 crore (Rs 706.89 billion) in 2006-07 to Rs 1,66,687 crore (Rs 1,666.87 billion) in 2010-11.

CBDT's focus will be on generating awareness about TDS rules and plugging loopholes in TDS payments and their reporting by assesses.

As part of this, it is enhancing vigil on interest earned from deposit schemes, especially bank fixed deposits, where TDS is not paid in a large number of cases. The official said TDS on salaries would be targeted in the next phase.

The department conducted 2,798 TDS surveys and inspections in 2010-11 and reported a revenue gain of Rs 3,000 crore (Rs 30 billion).

There were 62 cases in which more than Rs 1 crore was collected.