NEW DELHI: People getting compensation for land acquired for national highway projects have been exempted from payment of income tax and stamp duties, a move that will bring relief to a large number of landowners and farmers. The Union road transport ministry has said that no deduction of tax at source (TDS) shall be made on such compensation payments, seeking compliance with this norm by all NH-owning agencies. During the 2025-26 financial year, around Rs 20,000 crore was disbursed for acquisition of over 10,000 hectares for highway development by different agencies. In a circular issued to NH agencies, including NHAI, road transport ministry said that compensation disbursed on acquisition of land under NH Act in cases where such compensation is determined as per provisions of land acquisition law of 2013 will be “treated as exempt” from levy of income tax under the law. The letter has referred to a circular of Central Board of Direct Taxes (CBDT) of Oct 25, 2016, and Section 402 of Income Tax Act, 2025, which clarify that compensation received under awards exempted under land acquisition law of 2013 shall not be taxable, even in absence of a specific provision.