Income Tax Death Benefits – Under section 166 of the motor act 1988 income tax return

Income taxpayers not only appreciated but also participate in the economic growth of the country. Income tax department completely supports the deceased person (death accrued during road accident) under section 166 of the motor act 1988 income tax return.

Income Tax Death Benefits

Who is to file Income tax return of the deceased is a different segment, but in this article you will learn ‘how will income tax return payers get compensation in case of accidental death’.

Section 166 of the motor act 1988 Income tax return

If the deceased is the only earning person in the family, the disaster brings financial challenges to their family.

In 2013, the Supreme Court of India ruled that it is the government’s duty to provide an accidental death benefit for Income Taxpayers to compensate for the family of the deceased who died in a motor accident.

Under Section 166 of the motor act 1988 Income tax return, if the deceased person (taxpayer) has been paying income tax returns for 3 years continuously.

In that case, the government needs to compensate the dead person family 3 times of this average income.

Related post: — How to file Income tax return of Deceased person in India?

Accidental death benefit for income taxpayers with example

For instance: In general practice, the majority of people holding life insurance policy or term plan, some of the life insurance companies also provide addon benefits to their policyholders.

The sum assured will be reimbursed to the nominee of the holder in case of natural death or any other unnatural death (like a road accident).

In case of death occurred in road accident income tax return benefits after death is 3 times of this average income is compensated to the taxpayer.

Mr. Ranee honestly filling their income tax from the last 20 years, and his last average income as per IT return is 12 Lakhs, under section 166 of the motor act 1988, Mr. Ranee family will get approx 36 lakhs as income tax death benefits.

How to claim income tax death benefits?

The loss of dear one is very painful and untold misery if the loved one is the only earning member of the family, it not only causes emotional but also financial.

It is very important to keep and maintain the proper documentation to compensate for the death benefit of the deceased.

  • Copy of Income-tax return (3 years).
  • Fir Copy.
  • Notarised Death certificate & Notarised Birth certificate
  • PAN card.
  • Evidence of relationship with the deceased.
  • Post Mortem report.

Who is liable to pay claim u/s income tax death benefits

According to the Supreme Court of India rule in 2013 against petition no 9858.

If a person dies in a road accident and he is regularly filing his income tax return then the Government has the duty to give compensation to the family of the deceased person.

Final Verdict

It is very important for every person in India to fill his income tax return every year without fail. In any disaster scenario for your family, the compensation amount claimed by the family of the deceased can be reduced or completely refused by the government if the evidence of not filing the return encountered in the process.

Disclaimer: It is also recommended to consult a lawyer and charted accountant before heading forward.

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