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Indian Motor Vehicle Act, 1988: Features, Rules & Penalties
Feb 19, 2023

Indian Motor Vehicle Act 1988: Features, Rules & Penalties

The Motor Vehicles Act of 1988 was introduced in the parliament with the intention of governing all road vehicles and creating proper rules and regulations that all vehicle owners would be required to adhere to. The Act came into effect on 1st July 1989. The Act was created after consultations with the state transport ministers of all the Indian states. One of the main objectives of the Act was to supersede the existing Motor Vehicles Act of 1939 which had become obsolete with time. The Act was created keeping in mind the constant advancement of vehicular technology along with the increase in demand for vehicles.

Overview of the Motor Vehicles Act

Some of the basic overviews of this Act are:
  1. Each driver driving a vehicle on the road is required to have a valid license.
  2. Each vehicle owner has to get their vehicle registered, which usually lasts for 15 years under the Act.
  3. Each vehicle owner on the road should have insurance for their vehicle. If you have a car, you are required to have car insurance. If you have a bike, you are required to have bike insurance.

Major sections of the act

The following are the important sections of the Motor Vehicles Act:
  1. Section 3- A license issued by the authorities is compulsory to be able to drive your vehicle on Indian roads. This is applicable to cars, bikes, rickshaws, and heavy vehicles, amongst others.
  2. Section 4- A permanent license can be issued only to those above the age of 18. Those below are not allowed to drive any type of vehicle unless they hold a learner’s permit, which is issued at the age of 16.
  3. Section 39- If you own a vehicle, you are required by the Act to get it registered for it to be legally driven.
  4. Section 112- You need to adhere to the speed limits laid down by the Road Transport Ministry. The speed limits vary from state to state. Exceeding these limits could get you fined.
  5. Section 140- The driver of the vehicle has to compensate the third party if the damage is caused to the latter’s vehicle or property. In case someone gets injured or breathes their last, the compensation is as follows:
  6. 50,000 if someone passes away
  7. 25,000 if a permanent disability is caused
  8. Section 185- If the driver is found to be driving their vehicle under the influence of alcohol or drugs, they would be fined under the following condition:
  9. The permissible limit is 30mg per 100 ml of blood. Exceeding this limit is an offence.

Amendments to the Motor Vehicles Act

In 2019, the Motor Vehicle Amendment Bill was introduced in the Indian parliament to keep up with changing times and trends. Listed below are some of the amendments:
  1. Aadhar Card is mandatory when applying for license as well registration of the vehicle.
  2. Compensation of Rs. 2 Lakhs to be given by the government to the family of hit-and-run victims.
  3. Legal guardians to be held liable if a minor is found driving a vehicle, either supervised or unsupervised.
  4. The penalty of drunk driving is increased to Rs. 10,000
  5. The previous liability limit for third-party was removed in cases of someone breathing their last or incurring serious injury.
These amendments were ratified and implemented in 2020 by the government.

Penalties as per the new Amendment

These are some of the penalties introduced in the Act in 2019:
  1. A fine of Rs.5,000 and/or community service if found driving your vehicle without a license.
  2. A fine of Rs.10,000 and/or a prison sentence of 6 months if found driving under the influence of alcohol or drugs for first-time offense. Fine increases to Rs.15,000 and/or 2 years of prison for a repeated offense.
  3. A fine of Rs.1,000 and/or community service for driving without a seatbelt.
  4. A fine of Rs.5,000 if found to be talking on the phone or using it while driving.
  5. A fine of Rs.500 if found to be driving without a helmet.
The Motor Vehicles Act makes third-party insurance mandatory. For first-time offenses of driving without insurance, the fine is Rs. 2,000 and/or 3 months of prison along with community service. The fine increases to Rs. 4,000 for repeat offenses.


As proper regulation is required to keep the vehicles and their drivers under check, this Act is essential. So is the appropriate general insurance policy for your vehicle under this Act if you do not wish to pay hefty fines for not owning it.   Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.  

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