Paid Advise

Can a Builder charge interest on Maintenance?

Shivendra Pratap Singh

Advocate

24/05/2022

Reading Time:

Question: Can a Builder charge interest on Maintenance, Maintenance security deposit, Prime lending charges (PLC), and Documentation charges? The property was already built and ready to move. But due to a delay in payment, I had not taken possession yet. 

Although I have been paying every 1-2 months a lump sum amount. The entire payment was supposed to be cleared by March 21, while till March 21, I paid only 30-40% amount and the rest I have cleared in instalments and cleared the total amount by March 22 (1 Year gap). 

I got NOC on 31st March 22.  Though I got NOC from the Builder side, I had been reporting my grievances of interest charges on the above-said items for the last 3-4 months through Mails. Also as per the Income-tax clause, on more than 50 Lacs payment, TDS (1% of total amount) to be deducted by the payer and to be paid to the IT, 

But every time the Builder sent me notices and asked me to pay the money as per their demand which I obliged and then in the end, I saw that the entire money has been paid to the builder without deducting TDS (1% of total amount). 

Now I am reporting my grievances to the builder to refund the interest amount which he took from me on the TDS amount (1% TDS of the total amount) which was supposed to be deducted by me, which I didn’t do, I kept doing payment as per Builder demand letter and notices. And the builder charged interest on this 1% TDS (of total amount) amount too, which was supposed to be interest-free. 

Now Builder is not listening. Please guide and advise me, whether my concern is genuine and as per Law and whether I can proceed ahead with the RERA complaint filing and Consumer court complaint filing against Builder.

Asked from: Bihar

The housing society is not doing any business therefore, it cannot claim interest on the late payment of maintenance fee. The society does not comply with the income tax provisions in respect of collection of maintenance fees. It is not a business entity or a corporate body. 

The housing society keeps its deposits with cooperative banks. All of the interest on its deposits with the cooperative bank, shall be fully excluded from the income of the housing society. 

When the society invests its money or derives any income out of the money it has been receiving from the residents contribution then it has to comply with the Income Tax rules. Then the society is a tax entity under the income tax laws.

The society can collect TDS on salaries to its employees, payment to contractors to carry out construction works or interest on money borrowed. But collection of TDS from residents is illegal it is not a property tax

You should file a complaint to the Income Tax Commissioner for such an illegal tax collection. It has no right to collect TDS from the member of society. 

shivendra pratap singh advocate

Shivendra Pratap Singh

Advocate

Practising lawyer in the High Court Lucknow. You can consult on Criminal, Civil, Matrimonial, Writ, Service matters, Property, Revenue and RERA related issues.

More For you

Appeal against dismissal of interlocutory application

Question: Appeal against dismissal of interlocutory application. My Grandparents had 7 children and among them 4 sons and 3 daughters. Joint family property is around 130 acres which was divided among all family members under Registered Family Settlement (RFS) in 1972...

Sale deed time out

Question: We had sold our land to a company back in 2018. He kept delaying registration but he paid us in instalments. We have around 70% of the total amount but we haven't been in touch for the last 2 years. We have filled our presence in tehsil on the last decided...

Can husband gift mother’s property to his second wife?

Question: Can husband gift mother’s property to his second wife? My husband married me after his divorce. He has a daughter from his first marriage and is living with her mom. I have also a daughter. My question is that if my husband gift me his mother's property to...

Recovery of money from elder brother

Question: My elder brother and two sons took a loan from me for agricultural land development and my brother gave surety for that amount. Later my brother's sons did not return money so went into court and in court my brother agreed that “he needed to pay money for my...

Buying property without home loan 

Question: I have booked a flat for Rs. 51000 in Badlapur, Maharashtra. The price of that 1 bhk is 28 lakhs. I am buying that property without a home loan. The builder said you will get possession till the end of July 2022. But the housing website is showing June 2023...

How to recover possession of my land?

Question: Buyer has illegally encroached on my grandfather's property. In this condition please suggest how to recover possession of my land? I am fighting for my grandfather's property. My Grandfather has agricultural land of about 17 acres. In 1988 my grandfather...

Builder address not available for RERA filing 

Question: Can we file a case against the builder if his address is not available for RERA filing? Builder address given during registration not active. How to file a complaint to RERA if the builder address is not found to send a summon. He has left that office but...

Kanoonirai has been advising in legal issues since October 2014. You can consult a lawyer through online media, telephonic consultation and video conferencing.

Contact

mail[at]kanoonirai.com
+91-91400-4[nine][six]54