Based on the study about the influence of the distributed capacitance current of long-distance four-parallel lines on same tower on differential current protection, the Pi-mode circuit for the twelve-sequence (mode) networks is established. On this basis, the paper presents a novel time-domain capacitive current compensating algorithm and phasor capacitive current compensation method. Both of two capacitive current compensating algorithms take account of the electromagnetic coupling between the lines. It comparatively analyzes the characteristics of current differential protection schemes such as non-capacitance current compensating, phasor-domain capacitance current compensating and time-domain capacitance current compensating. Simulation results verify that the setting value of differential protection and selectivity and sensitivity of differential protection have been obviously improved by using the time-domain capacitive current compensating algorithm.