The Supreme Court has directed the government to look into money deducted from motor accident compensation awards as TDS lying as unclaimed refunds with respect to claimants who are not Income Tax assesses.
In the matter of Bajaj Allianz General Insurance Company Private Ltd. vs. Union of India, the court was considering guidelines to streamline the process of disbursement of compensation to the victims of motor vehicle accidents. In the previous order passed on November 16, 2021, the bench had dealt with the aspect of TDS in the awards passed by the Motor Accident Claims Tribunals (MACT) at two different rates – 10% and 20% – across the country.
Jayant K. Sud, Additional Solicitor General submitted that a uniform system is being brought in place by the Centre whereby TDS will be uniformly 10% for all categories of cases.
It was pointed out that there are large amounts of money collected as TDS on award lying unused as the claimants are not fully aware as to how to obtain the refund.
The division bench of Justice Sanjay Kishan Kaul and Justice MM Sundresh noted that this situation might be arising because many claimants are coming from poor economic backgrounds, who fall outside the Income Tax slabs.
The court called upon the ASG to look into this aspect and work out a system where this aspect can be dealt with.
BAJAJ ALLIANZ GENERAL INSURANCE COMPANY PRIVATE LTD. vs UNION OF INDIA & ORS.
CITATION: 2022 TAXSCAN (SC) 121
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