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Motor Accident Tribunal Must Adjust Tax, Other Deductions Before Assessing Income Of Deceased To Determine Compensation: Delhi High Court
Kapil Dhyani
17 Jun 2025 7:35 PM IST
The Delhi High Court has held that the Motor Accident Claims Tribunal must deduct the income tax and other statutory obligations from the income of the deceased, for determining the compensation payable to the kin.Justice Amit Mahajan relied on Sarla Verma and Ors. v. Delhi Transport Corporation and Anr.: (2009) where the Sypreme Court held that for calculating compensation, the income of...
The Delhi High Court has held that the Motor Accident Claims Tribunal must deduct the income tax and other statutory obligations from the income of the deceased, for determining the compensation payable to the kin.
Justice Amit Mahajan relied on Sarla Verma and Ors. v. Delhi Transport Corporation and Anr.: (2009) where the Sypreme Court held that for calculating compensation, the income of the victim less the income tax should be treated as the actual income.
Similarly in Vimal Kanwar and Ors. v. Kishore Den and Ors (2013 the Top Court had held that if the annual income comes within the taxable range, income tax is required to be deducted for determination of the actual salary.
In the case at hand, the deceased having an income of ₹34,300/- per month (gross annual income ₹4,11,600/-) passed away on being hit by a truck. MACT assessed the compensation at ₹49,82,740/-. Aggrieved by the quantum of compensation, the Insurance Company preferred this appeal.
It contended that the deceased, at the relevant time, fell under the tax slab for which 5% income tax was payable and the same ought to have been deducted by the learned Tribunal while assessing the income of the deceased.
The High Court agreed that since the gross annual income would be subject to tax as applicable at the relevant time, the Tribunal ought to have considered the applicable tax and its deduction for the purpose of assessing the income of the deceased.
In the same breath however, the Court noted that the deceased was entitled to benefit of standard deduction of ₹50,000/- from the gross annual income as well as benefit of deductions under the head of House Rent Allowance.
After taking into account such benefits, the Court noted that the net income of the deceased would be around ₹2,50,000/- and would not be liable for payment of any income tax.
As such, it refused to interfere with the quantum of the award.
Appearance: For the Appellant : Mr. Rajat Khattry, Adv.
Case title: Universal Sompo General Insurance Company Ltd v. Dinesh Kumar Singh & Ors.
Citation: 2025 LiveLaw (Del) 689
Case no.; MAC.APP. 106/2025