Tds on compensation payment to customers - real estate

Hi,

In the real estate business, if the builder is paying compensation to the customer for cancellation of booking due to a fault from the bulder's side, is this amount liable for TDS deduction? For eg. - Builder decides to pay interest @ 12% on the booking amount received from the customer along with the refund of booking amount. In this case, is this amount liable for deduction of TDS?

Please help me with the relevant case law, if any or necessary section under the act.

Thanks in advance.