Bombay HC: No TDS deductible by Builder on Refundable Amount paid to Home-Buyers

Last updated: 07 September 2021
Quick Summary
The Bombay High Court has ruled that builders cannot deduct Tax Deducted at Source (TDS) on refundable amounts paid to home buyers. This decision stems from a case where a builder deducted TDS on interest payments made under a recovery warrant. The court determined that these payments were in the nature of a judgment debt, not interest from a debtor-creditor relationship, and therefore not subject to TDS under the Income Tax Act.

Court :
Bombay High Court

Brief :
In Sainath Rajkumar Sarode and Ors. v. State of Maharashtra and Ors. [WRIT PETITION (L) NO. 4804 OF 2020 dated August 18, 2021], Sainath Rajkumar Sarode ("the Petitioner") has been filed seeking directions for the recovery of arrears due to the Petitioners under a Recovery Warrant dated October 15, 2018 passed by the Maharashtra Real Estate Regulatory Authority against Respondent Nos. 4 to 7.

Citation :
WRIT PETITION (L) NO. 4804 OF 2020 dated August 18, 2021

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Bimal Jain
Published in Income Tax
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