Royalty on land acquisition

Depends upon the act under which its aquired. Recently,  RFCTLARR Act passed by Modiji Government, which came into effect from 1st January, 2014, provides that income-tax shall not be levied on any award or agreement made [except those made under section 46) under the RFCTLARR Act Therefore, compensation received for compulsory acquisition of land under the RFCTLARR Act is exempted from the levy of income-tax.

As per earlier act also, any aquisition of agricultural land in rural area was tax exempt.

Any compensation received by a farmer on aquisition of his Rural agricultural land is tax exempt