Union Finance Minister Nirmala Sitharaman, during the Union Budget 2026–27 presentation in Parliament, announced that any interest awarded by the Motor Accident Claims Tribunal (MACT) to a natural person will be exempt from income tax.
Focus on a simpler, citizen-friendly tax system
While presenting the Budget, the Finance Minister said that the government’s focus is on making the income tax system simpler and more citizen-friendly.
TDS on MACT interest to be removed
As part of this effort, she announced that any tax deducted at source (TDS) on interest awarded by the Motor Accident Claims Tribunal to a natural person will be done away with.
“Any interest awarded by the Motor Accident Claims Tribunal to a natural person will be exempt from income tax and any TDS from this account will be done away with,” Sitharaman said.
Relief for accident victims and families
The move is expected to benefit accident victims and their families, ensuring that the compensation received is not reduced due to tax deductions.
Auto majors welcome India–EU Free Trade Agreement
In other news, auto majors Mercedes-Benz, BMW, Skoda Auto Volkswagen, Audi, and Stellantis have welcomed the signing of the free trade agreement (FTA) between India and the European Union, calling it a “landmark event” that is expected to drive technological innovation and boost India’s economy.
No immediate cut in vehicle prices
However, the luxury carmakers ruled out any reduction in vehicle prices in the foreseeable future, indicating that the agreement will not have an immediate impact on car pricing.
High local manufacturing limits pricing impact
Explaining the limited impact on prices, Mercedes-Benz India Managing Director and CEO Santosh Iyer said that over 90 per cent of the company’s sales volume in India comes from locally manufactured ‘Made in India’ models, while only around 5 per cent of sales are through completely built unit (CBU) imports from the European Union.
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