Can a Builder charge interest on Maintenance?
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.
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.