Land Acquisition Compensation Under the 2013 Act
Market value, then a multiplier, then assets, then 100% solatium, then interest. The exam tests the order.
When government acquires land, the owner does not get market value alone. The 2013 Act builds the award in layers: a statutory market value, a multiplier for rural land, the value of buildings and trees on the land, a 100% solatium on top, and interest for the time the process took. Each layer has its own rule, and the exam tests the order.
Valuers meet this Act in two ways: helping the Collector value buildings and other assets attached to the land (section 29 lets the Collector use a competent engineer or specialist), and preparing valuations for owners who challenge the award.
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Building the Award, Layer by Layer
- 1
Market value of the land (s.26(1))
The highest of: the market value under the Indian Stamp Act for the area; the average sale price of similar land in the nearest village or vicinity; and, for private-company or PPP acquisitions, the consented amount. The date is the date of the section 11 preliminary notification.
- 2
Average sale price (Explanations 1 to 4)
Take registered sale deeds or agreements for similar land over the three years before the year of acquisition, use the half with the highest prices, exclude prices paid as acquisition compensation earlier in the district, and discount prices the Collector finds not indicative of the market.
- 3
Multiply by the factor (s.26(2), First Schedule)
Rural land: a factor from 1.00 to 2.00, based on distance from the urban area, as notified by the appropriate government. Urban land: 1.
- 4
Add assets attached to the land (ss.27 and 29)
Buildings, trees, plants and standing crops, valued with the help of engineers or agricultural and forestry experts as needed.
- 5
Add solatium (s.30(1))
100% of the compensation amount, in addition to it.
- 6
Add the 12% amount (s.30(3))
12% a year on the market value from the date the Social Impact Assessment notification is published to the date of the award or of taking possession, whichever is earlier.
Worked Example: A Rural Award
Illustrative figures for 2 hectares of rural land. The 1.5 factor stands in for whatever the state has notified for that distance band.
Stamp Act market value
Working
2 ha × ₹40 lakh
Amount
₹80,00,000
Average of top-half sale deeds
Working
2 ha × ₹50 lakh
Amount
₹1,00,00,000
Market value (higher of the two)
Working
s.26(1)
Amount
₹1,00,00,000
After rural factor
Working
₹1,00,00,000 × 1.5
Amount
₹1,50,00,000
Building and trees
Working
Engineer's and horticulturist's valuation
Amount
₹20,00,000
Compensation before solatium
Working
₹1,50,00,000 + ₹20,00,000
Amount
₹1,70,00,000
Solatium at 100%
Working
₹1,70,00,000 × 100%
Amount
₹1,70,00,000
12% amount for 18 months
Working
₹1,00,00,000 × 12% × 1.5 years
Amount
₹18,00,000
Total award
Working
Amount
₹3,58,00,000
| Layer | Working | Amount |
|---|---|---|
| Stamp Act market value | 2 ha × ₹40 lakh | ₹80,00,000 |
| Average of top-half sale deeds | 2 ha × ₹50 lakh | ₹1,00,00,000 |
| Market value (higher of the two) | s.26(1) | ₹1,00,00,000 |
| After rural factor | ₹1,00,00,000 × 1.5 | ₹1,50,00,000 |
| Building and trees | Engineer's and horticulturist's valuation | ₹20,00,000 |
| Compensation before solatium | ₹1,50,00,000 + ₹20,00,000 | ₹1,70,00,000 |
| Solatium at 100% | ₹1,70,00,000 × 100% | ₹1,70,00,000 |
| 12% amount for 18 months | ₹1,00,00,000 × 12% × 1.5 years | ₹18,00,000 |
| Total award | ₹3,58,00,000 |
Other Heads the Collector Must Consider (s.28)
- check_circleDamage from taking standing crops and trees.
- check_circleSeverance: damage from cutting the acquired land off from the owner's other land.
- check_circleInjurious affection to the owner's other property or earnings.
- check_circleReasonable costs of moving residence or business.
- check_circleLoss of profits between the section 19 declaration and possession.
- check_circleAny other ground in the interest of equity and justice for the affected families.
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Challenging the Award
An owner who does not accept the award applies to the Collector for a reference to the Authority (s.64): within six weeks of the award if present or represented before the Collector, otherwise within six weeks of the section 21 notice or six months of the award, whichever expires first. The Collector may accept a late application within a further year for sufficient cause. The Authority also awards 12% a year and a 100% solatium (s.69).
How the Valuation Examination Tests This
Expect a computation like the one above, or a one-mark question on a single layer. The common traps: applying the solatium to land value only instead of to the whole compensation, using the factor of 1 for rural land, averaging all sale deeds instead of the highest half, and taking the market value date as the award date rather than the section 11 notification.
FAQs
How is market value of land determined under the 2013 Land Acquisition Act?expand_more
Section 26 takes the highest of the Indian Stamp Act market value for the area, the average of the highest-priced half of similar sale deeds over the previous three years, and any consented amount for private or PPP projects, then multiplies it by the First Schedule factor.
What is solatium in land acquisition?expand_more
An amount equal to 100% of the compensation, added on top of it under section 30(1), for the compulsory nature of the acquisition.
What is the multiplication factor for rural land?expand_more
Between 1.00 and 2.00, depending on the distance of the project from the urban area, as notified by the appropriate government. For urban land the factor is 1.
Do states follow the central Act exactly?expand_more
Not always. Several states have amended the Act or notified their own factors and rules, so an actual award must be checked against the state's version.
Next steps
- Guideline Valuearrow_forward
- Land Valuationarrow_forward
- Market Approacharrow_forward
- Syllabusarrow_forward
Timed and scored, with negative marking.