The official had demanded the amount to clear pending bills of the contractor, said the anti-corruption bureau.
Bhaskar Banbole (57), posted as a tehsildar at Sindewahi in the district was arrested from his office, while allegedly accepting the amount from the contractor, the ACB said.
Banbole had demanded Rs 1.65 lakh but later scaled down the amount to Rs 1.60 lakh after negotiations, said the ACB officials.
The contractor lodged a complaint with the ACB, which laid a trap at the tehsil office and apprehended Banbole, the official said.