Supreme Court Formulates Guidelines on Using Income Tax Returns for Motor Accident Compensation
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Case: RASHMIREKHA TRIPATHY v. THE BRANCH MANAGER (LEGAL CLAIMS) SHRIRAM GENERAL INSURANCE COMPANY LTD.
Court: Supreme Court of India
Date: 01-07-2026
Law: Motor Vehicles Act, Law of Tort, Indian Evidence Act.
Highlights of the Judgment:
- Bifurcated guidelines for assessing the income of salaried versus self-employed deceased individuals under the Motor Vehicles Act, 1988.
- Rule holding that the preceding year's ITR is sufficient for salaried individuals to capture recent financial advancements.
- Requirement of averaging up to three years of ITRs for self-employed individuals to balance business fluctuations.
- Evidentiary standard for scrutinizing post-death ITR filings to prevent reliance on artificially inflated income.
- Consideration of business growth patterns, geographic location, and capital intensity to determine "just and fair compensation".
- Application of the landmark Pranay Sethi precedent for calculating future prospects and conventional heads.