Growing dependence of modern society on electrical energy has resulted into increasingly complex nature of electrical power systems. It requires operation of the network closer to their stability limits. This leads to compensated transmission lines. Installing capacitors of fixed or controllable value provides a viable solution to improve power system stability and also to optimize power flow transmission capability of electrical grids transmission capability of power grid, optimize power flow and to improve system stability. However, installations of capacitors results into changing directions and values of fault currents and voltages in the networks. It causes problems for protective relays and fault locators. Distance relay is prone to maloperate due to large variations in voltage and current. Since fault location and classification are important tasks to safe guard electric power systems, as per the literature survey various practical or theoretical schemes are used to attain the reliable protection system for transmission lines equipped with compensation capacitors. This paper highlights merits and demerits of different methodologies to enhance distance protection of compensated transmission lines. © 2015 IEEE.