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Old 1st December 2010, 08:30   #1
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Post Vehicle fully damaged? Get life tax refund

Hi,

Todays TOI article on Life time tax refund on Fully Damaged vehicle. actually till date i have no idea that we can get remaining tax refund, it's good to know the rules, govt. made



TIMES NEWS NETWORK

Bangalore: It is a common practice to submit registration certificate (RC) book to the insurance company and claim money when a vehicle damaged in an accident is beyond repair and needs to hit the junkyard.
However, motorists often forget that they can claim the remaining life tax paid for the vehicle from the transport department. Life tax on a vehicle is assessed on the presumption that a vehicle’s life span is 15 years. If a vehicle is damaged completely in an accident, then owners can claim refund of life tax for the number of years remaining from the 15-year timeframe, after deducting tax for the number of years it was in use on the road.
In a recent judgment, the Karnataka Consumer Disputes Redressal Forum fined National Insurance Company to the tune of Rs 10,000 and directed it to settle the complainant’s insurance amount of Rs 4.55 lakh with 12% interest.
The incident dates back to June 2008 when the car belonging to A M Srinivas of Yashila Healthcare Devices met with an accident. After assessing the damage to over Rs 4.55 lakh, the insurance company asked him to surrender the RC book as they wanted to sell the damaged vehicle as salvage. However, Srinivas refused to surrender the RC, saying the insurance company was free to sell the salvage, but he would be cancelling the RC and getting a refund of the tax. The company refused to settle the insurance and Srinivas approached the Consumer Forum, which ruled in his favour.
YES, IT CAN BE DONE
Transport commissioner Bhaskar Rao confirmed that the department has a provision to refund part of the life tax when vehicles are damaged beyond repair. “Very few people claim this facility. We don’t have statistics of vehicles that get damaged beyond repair as they’re maintained at RTO levels,” he said.
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Old 1st December 2010, 08:40   #2
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Beautiful; as I keep saying the laws in this country is really great , but on papers!!!

I hope the procedure would be that, the insurance company verifies the damaged vehicle using the RC book & needs the RC book no more & thus the owners can surrender the RC to RTO & gain the tax refund.

So are all these days, are the insurance companies claiming the balance tax on behalf of the owners?
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Old 1st December 2010, 10:21   #3
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Even I was under the impression that once the vehicle is declared a total loss the owner surrenders to the RC to the RTO rather than the Insurance co. But what I did not expect was getting the life timetax refund and that too from RTO. Thats news to me.

What if the owner buys a new vehicle, would the life time tax be transferred to the new vehicle? Any ideas about the time frame for the RTO refund?
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Old 1st December 2010, 16:34   #4
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And while we're on the topic.

Anybody has any ideas regarding the refunds chances in case the vehicle is STOLEN?

I guess the same funda should apply. In any case, the owner is not getting the vehicle back, is getting the money from the insurance company sans the tax part.

would be interesting to know the scenario in this case.
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Old 9th December 2010, 04:59   #5
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Default Re: Vehicle fully damaged? Get life tax refund

Refer this thread - http://www.team-bhp.com/forum/indian...otal-loss.html (Ford Fusion - Total Loss)

Here a scrap dealer buys the Fusion. Now, if the story turns out that some good restorer or Fusion lover decides to restore this one, wouldn't he need the RC book? Say the guy buys from the scrap dealer or the scrap dealer himself wants to restore this vehicle; so doesn't the Insurance company need the RC book to be collected when totalling out the vehicle?

Someone help me understand pls?
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Old 9th December 2010, 12:21   #6
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Default Re: Vehicle fully damaged? Get life tax refund

A Total Loss case can happen under two types:
1. Car insured: In this case the claim settlement is done by the Insurance Company and they pay the owner. The car is taken on by insurance company in its entirety. Further on what they do is their prerogative. In this case the owner has to submit the RC also. Most of these cars depending upon the damage go to restorer market and get sold finally to Tier-II/III cities as used vehicles.
2. Car not Insured: In that case the owner can sell his car to the stripper or junk yard and cancel the registration from the RTO. In this case they can claim refund of life tax from RTO. But how long will that take is another matter!

P.S: Actually you can file an RTI and get it fast.
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Old 9th December 2010, 13:41   #7
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Default Re: Vehicle fully damaged? Get life tax refund

^^^^

Regarding point number one.

The forum has ruled that there is no need to give the RC to the insurance company. The dispute was primarily on this point.

Murthy
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Old 15th February 2016, 14:54   #8
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Default In case of Total loss, do you get registration amount back(pro rata of course). If not, why not?

I was thinking that whenever we move the car out of state, we get part of the RC tax back because car will no longer be used in the state.
Shouldn't the same policy apply to total loss? For example, a car has lifetime tax paid, and goes total loss after 2-3 years. Shouldn't the RTO pay back the tax using the same formula they use for moving states?

If they do not do so, its high time somebody challenges these in courts.
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Old 15th February 2016, 15:49   #9
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Default Re: In case of Total loss, do you get registration amount back(pro rata of course). If not, why not?

This is what Kerala MVD site says:

Quote:
Notwithstanding anything contained in this Act, a registered owner who has paid tax for a year or more shall be entitled to refund of tax at such rates as may be prescribed on cancellation of the registration of the vehicle or removal of the vehicle to any place outside the State on account of transfer of ownership or change of address
And this is what Motor Vehicles Act says:

Quote:
55. Cancellation of registration. – (1) If a motor vehicle has been destroyed or has been rendered permanently incapable of use, the owner shall, within fourteen days or as soon as may be, report the fact to the registering authority within whose jurisdiction he has the residence or place of business where the vehicle is normally kept, as the case may be, and shall forward to the authority the certificate of registration of the vehicle.
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Old 15th February 2016, 16:08   #10
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Default Re: In case of Total loss, do you get registration amount back(pro rata of course). If not, why not?

Quote:
Originally Posted by StarrySky View Post
This is what Kerala MVD site says:



And this is what Motor Vehicles Act says:
Thanks StarrySky
This is indeed news for me. I see a lot of posts talking about total loss and Insurance claim, and nobody ever mentions getting refund from the RTO!
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Old 15th February 2016, 16:24   #11
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Default Re: In case of Total loss, do you get registration amount back(pro rata of course). If not, why not?

Speaking on the same lines, I have a question -

Once a car gets totalled, we are paid a sum of money which is usually somewhere close to the IDV(Lets ignore all the variables). Suppose a 10L rupee car with 1L road tax is totalled on day one or two, the IDV of the car will be 10L. Hence, considering an ideal case, I should get somewhere close to 10L and not 11L. So, if I have to recover that portion of money, I should be sending the RC to the RTO and claiming the refund of road tax. Again ideally speaking I should be getting that 1L extra with some deductions. Finally the RTO will declare the car to be scrapped and RC void.

In the real case, we find that a large portion of totalled cars are taken by mechanics who do all types of Jugaad repairs and get the car back to shape and sell them. Suppose I need to hand over the car to such a party, what should be done? They would want the RC to be intact which means that I have to either ask them to pay up the road tax amount to me or retain the RC with me for further cancellation.

What is the ideal approach in this case? In theory, a totalled car shouldnt go back onto the road. But in practice, how to handle such a situation?
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Old 15th February 2016, 16:39   #12
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Default Re: In case of Total loss, do you get registration amount back(pro rata of course). If not, why not?

I doubt the refund part, RTO must be willing to issue a refund but the insurance company does not return the Registration Certificate as they auction off the totalled car, which in many cases is repaired.
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Old 15th February 2016, 16:49   #13
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Default Re: In case of Total loss, do you get registration amount back(pro rata of course). If not, why not?

Quote:
Originally Posted by .anshuman View Post
I doubt the refund part, RTO must be willing to issue a refund but the insurance company does not return the Registration Certificate as they auction off the totalled car, which in many cases is repaired.
If a vehicle is declared a "Total Loss", the insurance company has to sell the car for scrap and not to a mechanic for repairs. It is a requirement for all scrapyards to get a a letter from RTO stating that the registration has been cancelled before they can buy that vehicle.
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Old 15th February 2016, 16:52   #14
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Default Re: In case of Total loss, do you get registration amount back(pro rata of course). If not, why not?

Quote:
Originally Posted by .anshuman View Post
I doubt the refund part, RTO must be willing to issue a refund but the insurance company does not return the Registration Certificate as they auction off the totalled car, which in many cases is repaired.


Insurance company first tries auctioning the car for a particular time period and if they are not able to sell it off then to go forward to scrap dealers. They even give you an option to sell it off. In case it is sold to someone it is considered like buying a second hand car which just needs registration change to new owner name.

My i20 got totaled last year. My car was sold off to a scrap dealer by the insurance companies. After I got the receipt of the scrap dealer of purchasing my car with no intention to repair it with an authorization letter from insurance company that the car has been totaled. We also attached few affidavit which were needed as per RTO requirements.

Then I submitted all those documents to RTO which further cancelled the RC.

Last edited by ankit_chd : 15th February 2016 at 16:59.
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Old 15th February 2016, 18:56   #15
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Default Re: In case of Total loss, do you get registration amount back(pro rata of course). If not, why not?

Quote:
Originally Posted by ankit_chd View Post
Then I submitted all those documents to RTO which further cancelled the RC.
And what did you do with the road tax component? Did you ask for its refund?
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