The Madras High Court has ruled that compensation awarded by Motor Accident Claims Tribunal or the interest accruing therein cannot be subjected to tax deducted at source. <br/><br/>Dismissing the petition filed by the Tamil Nadu State Transport Corporation Limited, Justice MV Muralidaran said, the compensation awarded to the victim can not be classified as taxable income under the Income Tax Law.<br/><br/>Referring to an order of Himachal Pradesh High Court, Justice Muralidaran said, such legislation is passed with a benevolent intention for compensating the accident victims who have suffered bodily disablement or loss of life, while the Income Tax Act is primarily intended for Tax Collection by the state.<br/><br/>The court further said, compensation and the interest awarded therein does not fall under the term Income as defined under the Income tax act.