This paper proposes Phasor Measurement Unit (PMU) based adaptive zone settings of distance relays (PAZSD) methodology for protection of multi-terminal transmission lines (MTL). The PAZSD methodology employs current coefficients to adjust the zone settings of the relays during infeed situation. These coefficients are calculated in phasor data concentrator (PDC) at system protection center (SPC) using the current phasors obtained from PMUs. The functioning of the distance relays during infeed condition with and without the proposed methodology has been illustrated through a four-bus model implemented in PSCAD/EMTDC environment. Further, the performance of the proposed methodology has been validated in real-time, on a laboratory prototype of Extra High Voltage multi-terminal transmission lines (EHV MTL). The phasors are estimated in PMUs using NI cRIO-9063 chassis embedded with data acquisition sensors in conjunction with LabVIEW software. The simulation and hardware results prove the efficacy of the proposed methodology in enhancing the performance and reliability of conventional distance protection system in real-time EHV MTLs.