Division of Land has been the next step which the king keeps in mind after the creation of the village. As the countryside mainly consisted forest areas which used to be rich source of natural resource, this makes it important for the king to utilise this area in a much more organised manner. As such Arthashastra advises its king to equally divide the forest land in particular along with the cultivable land among the forests and pastoral land.

Division of land mainly includes the forest area around the village, forests for the elephants, forests for timber and uncultivated land for pasture. With the division of land Arthashastra makes provisions for the Brahmans who shall be provided with forests for the soma plantation, for religious learning and for the performance of penance. Such forests will be rendered free from animals and will be named after the name of the tribe from which the Brahmin belongs to or after his gotra. Further the forest area around the village provides with large variety of delicious fruit trees, bushes, bowers and thorn less trees with an expansive lake of water for all the tamed and peaceful animals.

Division of land keeps provisions for game - forests with game beasts; for manufactories to prepare commodities from forest products; keeps provision for timber forests which shall be separated from wild tracts. The superintendent in charge of the forests shall be responsible for the maintenance of security within the forest areas. At the same time he is supposed to know all the inns and outs of the forest routes which he shall require to utilise for himself as well as the village people. An important section of the chapter talks of the elephants which play an important role in the army of the country. As elephants have been an inevitable factor in the army, the king takes full measures to safeguard them and anyone who kills an elephant will be put to death. At the same time anyone who brings a pair of elephant will be given four annas as reward.

Thus division of land mainly includes the utilisation of forest regions around the countryside. The main intension is to utilise all the available natural resources which is easily accessible to even the poorest in the community.