According to reports, Tata is said to have submitted a higher bid.
The sale includes Air India’s 100% stake in AI Express and 50% in Air India SATS Airport Services.
It is reported that a presentation on the valuation of Air India was made earlier this week and the committee of secretaries took a call on the reserve price of the airline.
Representatives from the two companies are said to have met government officials.
However, neither the company representatives nor government officials revealed any details about the meeting.
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Citing some sources, Economic Times reported that the government would announce the winning bidder soon.
The exact date or time of the announcement was not divulged.
Air India was founded by Tata Group in 1932 and nationalised in 1953.
This is the second time that the government has put the debt-laden national airline on sale.
Previously, the government planned to sell a majority stake in Air India.
This proposal failed to take off as bidders were concerned about the government holding a certain stake in the company.
However, in this latest proposal, the government decided to sell the entire stake of Air India to a private owner along with its $3bn (Rs230bn) debt.
The winning bidder will have access to 4,400 domestic and 1,800 international landing and parking slots at local airports and 900 slots at airports internationally.