Palghar police spokesperson Jayant Bajbale said the accused, identified as Laxmikanth Tiwari and his daughter Jyoti (23) were held yesterday.
The duo chalked out an extortion plan wherein Jyoti posed as a reporter of a local channel and met the builder at his office in Virar in May, the officer said.
She threatened the victim that the construction carried out by his company in Virar was "illegal" and she would seek information about the detail of his work under RTI from the local civic corporation.
They however settled the deal at Rs 1 lakh and under pressure, the builder shelled out Rs 30,000 on May 22, which was received by a middle man, named Rohit.
After he paid the first instalment, the builder approached Virar police and lodged a complaint.
The victim told the police that he was to hand over the second portion of the extortion sum yesterday at a hotel, following which police laid a trap and arrested Jyoti while she was receiving Rs 20,000.
The duo was booked under IPC sections 354 (extortion) and 385 (putting person in fear of injury in order to commit extortion) rw 34 (common intention), police said.
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