MACT Compensation: How It Is Calculated in India (2026)

Explainer · Motor Accident Compensation

Updated for 2026 · Claw Editorial

Compensation for a motor accident is not a guess. For death cases, Indian courts follow a settled method built from two Supreme Court judgments: Sarla Verma v DTC (2009) and National Insurance Co v Pranay Sethi (2017). The idea is simple. Work out the yearly money the family has lost, adjust it for the likely rise in income and the share the deceased spent on himself, and multiply by a number fixed by age. Then add some fixed amounts for the loss itself. This explainer walks through each step with a worked example. Last verified October 2026.

01The basic idea

When a person dies in a motor accident, the law tries to put the family, in money terms, roughly where they would have been if the earning member had lived. This is called loss of dependency. The tribunal asks: how much money would have reached the family each year, and for how many years, and then gives a lump sum that stands for all of it.

To keep awards fair and consistent across the country, the Supreme Court laid down a step-by-step formula. In injury cases the approach is similar but also covers medical cost, loss of earning due to disability, and pain and suffering. The steps below are mainly for death cases, where the method is most settled.

02Step 1: fix the income

The starting point is the yearly income of the person who died. For a salaried person, the tribunal takes the actual salary, usually the take-home figure after tax. For a self-employed person or someone on a fixed wage, it takes proven income, and where there is no proof, it uses a reasonable notional income based on the work done.

Getting the income right matters more than anything else, because every later step multiplies this number.

03Step 2: add future prospects

A young earner would most likely have earned more over time through raises and growth. So the court adds a percentage for future prospects. Pranay Sethi fixed these additions for salaried and self-employed or fixed-income earners:

So if a person under 40 earned Rs 5,00,000 a year, you add 40% and treat the income as Rs 7,00,000 for the calculation.

04Step 3: deduct personal expenses

The family did not receive all of the income; the deceased spent some on himself. So the court deducts a share for personal and living expenses, based on how many dependants there are. The common rule from Sarla Verma is:

• 2 to 3 dependants: deduct one-third (the family got about two-thirds).
• 4 to 6 dependants: deduct one-fourth.
• More than 6 dependants: deduct one-fifth.

For a bachelor, a larger share, often about 50%, is treated as personal expense. What is left after this deduction is the yearly loss to the dependants.

05Step 4: apply the multiplier

The yearly loss is then multiplied by a number fixed by the age of the deceased. This multiplier stands for the number of years the income would have supported the family, adjusted so a lump sum paid today is fair. Sarla Verma set the table. In short form:

The younger the person, the higher the multiplier, because more earning years were lost.

06Step 5: add the conventional heads

On top of the loss of dependency, the court adds fixed amounts for the loss itself. Pranay Sethi set these conventional heads:

• Loss of estate: Rs 15,000
• Funeral expenses: Rs 15,000
• Loss of consortium: Rs 40,000 (for the loss of company and care, payable to the spouse and, as later rulings held, to children and parents)

07A worked example

Take a salaried person, aged 35, earning Rs 6,00,000 a year after tax, with a spouse and two children (three dependants).

• Income: Rs 6,00,000 a year.
• Future prospects: under 40, so add 40%. Income becomes Rs 8,40,000.
• Personal expenses: three dependants, so deduct one-third. Loss to family = two-thirds of Rs 8,40,000 = Rs 5,60,000 a year.
• Multiplier: age 35 falls in the 31 to 35 band, multiplier 16. So Rs 5,60,000 x 16 = Rs 89,60,000.
• Conventional heads: add the estate, funeral and consortium amounts (with the periodic uplift).

The rough loss of dependency here is about Rs 89.6 lakh, plus the conventional heads and interest. This is only an illustration; real awards turn on proof of income, the exact age and the number of dependants.

08Where Claw fits

Claw is an all-in-one legaltech platform for Indian advocates, law firms, and corporate legal teams, combining AI-based case search, an AI legal assistant (Legal GPT), case management, and compliance automation across all Indian courts and tribunals.

Compensation often rises or falls in the High Court, and the figure in your case depends heavily on how courts have treated similar facts, income levels and ages. Claw lets you search 30 crore+ judgments, with Supreme Court decisions from 1950 and High Court decisions from 1990, to find motor accident awards with comparable income, age and dependants, with results in under 5 seconds. It also tracks cases, orders and hearings across 9,102 courts, benches and forums, so you can follow how a tribunal or High Court is deciding a live matter. Claw does not use your case documents to train its AI models.

Create a FREE Claw account to find comparable compensation awards and track your own claim, using case search across Indian courts. To see how a claim is started, read how to file a MACT claim, and if the award is low, see how to appeal a MACT award.

09Sources and further reading

• India Code (Motor Vehicles Act, 1988): indiacode.nic.in
• Supreme Court of India (judgments, Sarla Verma and Pranay Sethi): main.sci.gov.in
• Claw: clawlaw.in

This explainer is general information, not legal advice. Figures and rules move with new judgments, so check the current case law and take advice from an advocate before relying on a number.

10Frequently asked questions