CHB to pay Rs 5.6 cr as TDS

Tribune News Service

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Chandigarh, March 25

The Chandigarh Housing Board (CHB) will now have to shell out Rs 5.6 crore as tax deducted at source (TDS) on the interest amount of Rs 56 crore paid to Parsvnath as part of the settlement deal over the Prideasia project.

According to the settlement deal over the Prideasia project in IT Park, the CHB has refunded Rs 572 crore to the builder.

The issue was raised at a meeting of the board of members of the CHB after Assistant Commissioner of Income Tax (TDS) DP Singh wrote to the Chairman of the CHB about non-deduction of TDS on the interest paid to the builder. It was pointed out that according to the provisions of Section 194-A of the Income Tax Act, 1961, the person responsible for making payments “is liable to deduct the tax at source at the rate of 10 per cent on payment of interest to such payee”.

After the CHB contested the stand of the Income Tax Department, the latter again wrote back that since Rs 572 crore was paid to the builder against Rs 516 crore received as the bid money, Rs 56 crore was paid as interest to the builder for a delay in the payment and hence tax was payable on it.

After discussing the matter in the board meeting, it was decided that the CHB would now deposit the amount “under protest” and seek a refund from the builder after the “latter discharges it of the income tax liability”.