The record
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- The Bombay High Court has ruled that interest paid on a housing loan and 'losses' under the Income-Tax Act cannot be deducted from an accident victim's income when calculating compensation under the Motor Vehicles Act.
- The ruling came in the case of a Pune doctor whose husband died in a 2005 truck accident, and it entitles her family to about Rs 17 lakh more than a tribunal awarded in 2012.
- The court reasoned that tax set-off provisions exist to lower tax liability, not to lower compensation, and that excluding home loan interest would leave dependents without enough to service the loan.
- The court also directed the insurer to pay interest on the award from 2006, when the claim was filed, rather than 2008.
What to watch next
- The court noted similar issues are pending in other claim cases, which will now follow this ruling
- The insurer's interest payment obligation now runs from the date the claim was filed, which may affect other pending awards
- The family had sought enhancement of compensation, so the final revised payout amount remains to be settled
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Named India · Bhupendra Kothadia · Pune · Abhay Nevgi · Amit Singh · Amol Gatne · Bombay High Court · D S Joshi · Jitendra Jain · Karishma Jhaveri · Motor Accident Claims Tribunal · T J Mendon · United India Insurance Company Ltd
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