In order to compute motor accident compensation in case of death of a person who was less than 40 years old and was self-employed, the Supreme Court has reiterated that addition of 40% income must be given towards future prospects.
"This Court in a Five Judge Bench decision in National Insurance Co. Ltd. v. Pranay Sethi, (2017) 16 SCC 680,clearly held that in case the deceased is self-employed and below the age of 40, 40% addition would be made to their income as future prospects. In the present case, the deceased was self-employed and was 37 years old, therefore, warranting the addition of 40% towards future prospects", the Supreme Court observed.
The Supreme Court found fault with this approach, as the Pranay Sethi judgment had held that deduction towards personal expenses must be 1/3rd of the income when the deceased was married with two dependents.