Tax on Interest received on cancellation of property

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  1. Manish Bararia

    Manish Bararia New Member


    I signed an MOU with a builder in Jul2012, for a plot under a township scheme in Pune. The MOU that we signed included full payment at that time, with a provision of interest at a predefined % rate compounded quarterly if the builder failed to give possession of the plot within 48 months (he also needed to get the Township clearance by then). Please note that no registration was done, since the Township wasnt approved at that time (and isnt still), it was just an MOU. Now, the 48 months have lapsed and the builder has agreed to pay the amount back with agreed interest, but is insisting on a 10% TDS deduction on the interest amount. I want to know whether this amount is taxable or not.

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