How to Calculate Vehicle Accident Compensation in Death Cases?

This write up is an attempt to simplify the mode of calculating motor vehicle compensation in death cases based on some Supreme Court (SC) judgements, the details of which are provided at the link provided at the end of this write up.

First calculate the multiplicand: To calculate just compensation in a death case, the first thing to be done is to calculate the annual income or dependency or multiplicand, after deducting the tax.

Then deduct the personal expenses: Then deduct the personal expenses and living expenses from it. The resultant amount is termed as annual income or multiplicand or dependency. For this exercise the claimant must establish the age of the deceased, the income of the deceased and the number of dependents.

Then ascertain multiplier & multiply with it: Then, ascertain the multiplier from the column 4 in the table in Sarala Verma judgement based on the age of the victim.

And finally multiply the annual income or dependency or multiplicand with the multiplier.

Add future prospects: Then, add Future Prospects to the above amount of dependency based on the basis of percentage provided in the Pranay Sethi judgement.

In short: When the annual income or multiplicand, after deducting personal expenses is multiplied with multiplier and added with Future Prospects, the net loss of dependency will be arrived at.

Along with that amount, add Loss of Estate, Funeral Expenses, Loss of Consortium as allowed in the Pranay Sethi judgement to arrive at the net compensation.

That means the formula would be: Multiplicand – personal expenses X multiplicand + Future Prospects + Loss of Estate + Loss of Consortium + Funeral Expenses = Net Compensation.


A model calculation in a death case


Annual Income = 1200 x 30 days = 36,000/ x 12 months                            = 4,32,000/

Less 1/3 personal expenses for a family of 3 members                                 =1,44,000/

Annual income – personal expenses  by deducting 1/3rd                            = 288,000/


Applying multiplier Rs 288000/ x 15   (for 40 years of age)                       = 43,20,000/

Plus 25 per cent                                                                                               = 10,80,000/

Total of the above                                                                                            = 54,00,000/

Loss of estate+ Loss of consortium + funeral 15000 + 400000 +15000    = 70,000/

Plus 20 per cent  as stated in Pranay Sethi judgement                                    = 14,000/

Total amount   of compensation                                                                   = 54, 84, 000/


NB: For learning more about how to calculate multiplicand, multiplier etc

please read the link at