IndiaWhat compensation is payable for land acquisition?
Compensation for land acquisition in India is generally based on the market value of the land, plus solatium (100% of market value), and other entitlements like rehabilitation and resettlement benefits under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.
What the Law Says
The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (LARR Act) governs land acquisition and sets out detailed rules for determining compensation, rehabilitation, and resettlement.
Compensation is calculated primarily on the 'market value' of the land — determined by the highest sale price paid for similar land in the vicinity during the preceding three years, or the stamp duty value, whichever is higher.
In rural areas, the total compensation is two times the market value; in urban areas, it is four times the market value. This includes solatium at 100% of the market value and other entitlements.
The Collector must make an award within 12 months of notification, and the entire compensation must be paid within 3 months of the award. Failure to pay attracts interest at 9% per annum.
For acquisitions involving private companies or public-private partnerships, prior consent of at least 70% of affected landowners (80% for private companies alone) is mandatory.
Statutory TextThe compensation for land acquired shall be four times the market value in case of acquisition of land situated in urban area and two times the market value in case of acquisition of land situated in rural area.
— Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, s. 26 — Determination of compensation
Statutory TextSolatium at the rate of one hundred per cent of the market value of the land acquired shall be paid to the owner of the land.
— Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, s. 30 — Solatium
Statutory TextThe Collector shall make an award within a period of twelve months from the date of publication of the declaration under section 19.
— Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, s. 23 — Time limit for award
What Courts Have Said
Indian courts have clarified key aspects of compensation calculation, timelines, and procedural fairness under the LARR Act, 2013.
Held that market value must reflect the highest price paid for comparable land in the last three years, and that delay in payment entitles claimants to interest at 9% p.a. under Section 34 of the LARR Act.
Clarified that the 2013 Act applies retrospectively to pending acquisitions where no award was made before its commencement, reinforcing fair compensation and R&R rights.
What to Do
Verify the published Social Impact Assessment (SIA) report and ensure your land is correctly surveyed and recorded.
File objections to the draft notification within 60 days of its publication under Section 5A of the LARR Act.
Attend the hearing before the Collector and submit evidence (sale deeds, revenue records) to support your claimed market value.
If dissatisfied with the award, file a written application for reference to the Civil Court within 6 months under Section 18.
Claim rehabilitation and resettlement (R&R) entitlements — including alternate land, housing, employment, and allowances — as per Chapter V of the LARR Act.
Sources
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JapanNot legal advice. This article is general information based on publicly available sources, written for educational purposes. Laws change and individual situations vary. Consult a licensed attorney in your jurisdiction before acting on anything you read here. Last reviewed: 2026-06-08.