New Delhi, July 27 -- The Bombay High Court has ruled that interest paid on a housing loan cannot be used to reduce the income of a deceased person while calculating compensation under the Motor Vehicles Act (MV Act), holding that income-tax provisions meant to determine tax liability cannot be imported to lower compensation payable to accident victims' families.

Justice Jitendra Jain delivered the ruling while allowing an appeal filed by the widow and children of a medical practitioner who died in a road accident. The family had challenged an order of the Motor Accident Claims Tribunal (MACT), which had calculated the deceased's income after setting off a loss under the "Income from House Property" head, representing housing loan intere...