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How To Apply For Insurance Claim After Accident? Where Does Licence Validity Come In? | Explained
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Even if your driving licence has expired, the law protects accident victims. Learn how insurance claims work and what the 30-day grace period covers
The rules for insurance claims following a road accident differ depending on whether it is a third-party claim or an own damage claim.
The Punjab and Haryana High Court has clarified that a driving licence remains valid for 30 days after its expiry. If an accident occurs on the 30th and final day of this grace period, the insurance company is legally required to honour the claim.
According to The Tribune, the licence in the case under consideration expired on June 4, 2001. The 30-day grace period began on June 5, meaning the licence remained valid until July 4, 2001. The accident took place on July 4, 2001, at around 10:45 am, and as it fell within the grace period, the licence was deemed legally valid.
Insurance Claims In India: What The Law Says
The rules for insurance claims following a road accident differ depending on whether it is a third-party claim or an own damage claim.
Third-Party Insurance: Mandatory for All Vehicles
Under Section 146 of the Motor Vehicles Act, 1988, third-party insurance is compulsory for every vehicle in India. Third-party claims relate to:
- Injury or death of a third party
- Damage to third-party property
The Supreme Court has consistently ruled that even if the driver has no licence, an expired licence, a suspended licence or a licence of the wrong category, the insurance company must still compensate the victim or their family.
This obligation remains even if:
- The driver has no driving licence at all
- The licence has expired
- The licence is suspended
- The licence belongs to an incorrect vehicle category
- The driver only holds a learner’s licence
‘Pay and Recover’ Principle
The Supreme Court frequently applies the pay and recover principle:
- The insurer must first pay compensation to the victim.
- The insurer may then recover the amount from the vehicle owner.
In 2023, the Supreme Court reaffirmed that the victim must not suffer because the driver lacked a valid licence.
Own Damage Claims: Strict Rules Apply
The rules for own damage claims are entirely different. Every motor insurance policy clearly states that the driver must have:
- A valid driving licence
- A proper licence for the vehicle category
If, at the time of the accident:
- The driver had no licence, or
- The licence had expired, or
- The licence was not appropriate for that vehicle,
the insurance company will reject the own damage claim entirely.
This position was upheld by the Supreme Court in Dharmendra Goyal vs Reliance General Insurance (2022) and reaffirmed in multiple judgements between 2023 and 2025.
The National Consumer Commission (NCDRC) issued similar rulings in dozens of cases.
Grace Period And Licence Validity
If an accident occurs within the 30-day grace period after the licence has expired, insurance policies provide full coverage, both for:
- Third-party claims, and
- Own damage claims
This rule is applicable nationwide.
When Is Renewal Necessary?
According to Section 15 of the Motor Vehicles Act, 1988 and the Central Motor Vehicles Rules, 1989:
30-Day Grace Period
- The licence remains fully valid for 30 days after expiry.
- There is no penalty if renewed within these 30 days.
Penalties After The Grace Period
- After 30 days: Rs 300 fine, increasing to Rs 1,000 per year.
- After 1 year: The applicant must take the driving test again.
- After 5 years: A complete restart is required, including a new learner’s licence.
Renewal Made Easier (2025 Guidelines)
The Ministry of Transport’s 2025 guidelines confirm:
- The 30-day grace period applies across India.
- Driving licences can be renewed instantly online via the Parivahan.gov.in portal.
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New Income Tax Act 2025 to come into effect from April 1, key reliefs announced in Budget 2026
New Delhi: Finance Minister Nirmala Sitharaman on Sunday said that the Income Tax Act 2025 will come into effect from April 1, 2026, and the I-T forms have been redesigned such that ordinary citizens can comply without difficulty for ease of living.
The new measures include exemption on insurance interest awards, nil deduction certificates for small taxpayers, and extension of the ITR filing deadline for non-audit cases to August 31.
Individuals with ITR 1 and ITR 2 will continue to file I-T returns till July 31.
“In July 2024, I announced a comprehensive review of the Income Tax Act 1961. This was completed in record time, and the Income Tax Act 2025 will come into effect from April 1, 2026. The forms have been redesigned such that ordinary citizens can comply without difficulty, for) ease of living,” she said while presenting the Budget 2026-27
In a move that directly eases cash-flow pressure on individuals making overseas payments, the Union Budget announced lower tax collection at source across key categories.
“I propose to reduce the TCS rate on the sale of overseas tour programme packages from the current 5 per cent and 20 per cent to 2 per cent without any stipulation of amount. I propose to reduce the TCS rate for pursuing education and for medical purposes from 5 per cent to 2 per cent,” said Sitharaman.
She clarified withholding on services, adding that “supply of manpower services is proposed to be specifically brought within the ambit of payment contractors for the purpose of TDS to avoid ambiguity”.
“Thus, TDS on these services will be at the rate of either 1 per cent or 2 per cent only,” she mentioned during her Budget speech.
The Budget also proposes a tax holiday for foreign cloud companies using data centres in India till 2047.
Business
Budget 2026 Live Updates: TCS On Overseas Tour Packages Slashed To 2%; TDS On Education LRS Eased
Union Budget 2026 Live Updates: Union Budget 2026 Live Updates: Finance Minister Nirmala Sitharaman is presenting the Union Budget 2026-27 in Parliament, her record ninth budget speech. During her Budget Speech, the FM will detail budgetary allocations and revenue projections for the upcoming financial year 2026-27. Sitharaman is notably dressed in a Kanjeevaram Silk saree, a nod to the traditional weaving sector in poll-bound Tamil Nadu.
The budget comes at a time when there is geopolitical turmoil, economic volatility and trade war. Different sectors are looking to get some support with new measures and relaxations ahead of the budget, especially export-oriented industries, which have borne the brunt of the higher US tariffs being imposed last year by the Trump administration.
On January 29, 2026, Sitharaman tabled the Economic Survey 2025-26, a comprehensive snapshot of the country’s macro-economic situation, in Parliament, setting the stage for the budget and showing the government’s roadmap. The survey projected that India’s economy is expected to grow 6.8%-7.2% in FY27, underscoring resilience even as global economic uncertainty persists.
Budget 2026 Expectations
Expectations across key sectors are taking shape as stakeholders look to the Budget for support that sustains growth, strengthens jobs and eases financial pressures:
Taxpayers & Households: Many taxpayers want practical improvements to the income tax structure that preserve simplicity while supporting long-term financial planning — including broader deductions for home loan interest and diversified retirement savings options.
New Tax Regime vs Old Tax Regime | New Income Tax Rules | Income Tax 2026
Businesses & Industry: With industrial output and investment showing resilience, firms are looking for policies that bolster capital formation, ease compliance, and expand infrastructure spending — especially in manufacturing and technology-driven sectors that promise jobs and exports.
Startups & Innovation: The startup ecosystem expects incentives around employee stock options and capital access, along with regulatory tweaks that encourage risk capital and talent retention without increasing compliance burdens.
Also See: Stock Market Updates Today
The Budget speech will be broadcast live here and on all other news channels. You can also catch all the updates about Budget 2026 on News18.com. News18 will provide detailed live blog updates on the Budget speech, and political, industry, and market reactions.
We are providing a full, detailed coverage of the union budget 2026 here, with a lot of insights, experts’ views and analyses. Stay tuned with us to get latest updates.
Also Read: Budget 2026 Live Streaming
Here are the Live Updates of Union Budget 2026:
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