Soil organic carbon (SOC) is a composite mixture of organic compounds derived from residues of plants, microbes and animals. Information on depth distribution of SOC fractions is scant, and most available studies are confined to the plough layer. Therefore, a field study was conducted during 2010-2012 in dry land region of Punjab, Pakistan. The specific objectives were: i) effect of tillage and crop sequences on biological, physical and chemical carbon fractions, ii) depth distribution of different soil carbon fractions in the soil profile, iii) agronomic and economic feasibility of conservation tillage systems, iv) relative C-sustainability index of management system. The experiment was laid out in a split-plot design having moldboard plough (MP) (control), tine cultivator (TC) and minimum tillage (MT) as main plots, and cropping sequences as sub-plots fallow–wheat (Triticum aestivum L.), (FW, control), mungbean (Vigna radiate L.)–wheat (MW), sorghum (Sorghum bicolor L.)–wheat (SW), green manure–wheat (GW) and mungbean-chickpea (MC) (Cicer arietinum L.). Treatment effects were assessed for microbial biomass carbon (MBC), potentially minerlizeable carbon (PMC), particulate organic carbon (POC), dissolved organic carbon (DOC), HCl insoluble carbon (HIC), stratification ratio (SR), aggregate stability, nutrients, yield,gross marginal benefit, cost benefit ratio, net benefit and carbon sustainability index (Cs). The results showed that MBC concentration by end of second year was highest at 15-30 cm depth under MW with MT system (360 μg g-1). The highest PMC concentration was assessed under SW with MT tillage at 45-60 cm depth (133 μg g-1 soil day-1). By the second year, under MP had higher POC at all depths in FW, MW, SW, SW and MW cropping sequences (2.03,1.69,1.03,1.06,0.96 Mg ha-1, respectively). xv Highest DOC concentration was at surfac under MC with TC (476 μg g-1). The highest HIC concentration was at 60-90cm depth was in TC with FW (11.3 Mg ha-1). The stratification ratio (SR) of PMC in the first year was highest under MT with FW at 0-15:15-30 depths (3.13 and POC was under TC and MP with FW at depths of 0-15:45-60 cm depths (18.5 and 9.39), respectively. The SR for DOC was highest under MP in the first year and with GW at 0-15:45-60 cm depths (1.89) and HCl insoluble C was observed under MT with SW at 0-15:45-60 (2.41Mg ha-1) depths. During 2010-2011, in summer, mungbean the highest aboveground biomass in MC under MP tillage (4.24 Mg ha-1 mungbean) and in MW under MT tillage (4.11 Mg ha-1 mungbean). In winter, chickpea gave the highest biomass in MC under both tillage systems. During 2011-2012, mungbean produced the highest aboveground biomass in MW under MT tillage (4.43 Mg ha-1 mungbean) and in both the MC and MW under MP tillage (4.24 and 4.17 Mg ha-1 mungbean, respectively). In winter, FW sequence gave the highest biomass in both tillage systems. The gross marginal benefit (GMB) ranged between -190 to $548 ha-1 in first year and -165 to $1124 ha-1 in the second year. The net benefit (NB) values were the highest in MC sequence under both tillage that gave cost benefit ratios (CBR) of 5.45 and 3.68 respectively. Use of legume-based cropping sequences is a sustainable and cost-effective practice. The maximum carbon sustainability index (Cs) was obtained Under MT with MC for both year in summer (77 and 130). MT is realitively more sustainable and cost effect therefore, with legume based cropping system could be the best options to enhance the C sustainability index in dry lands of northren Punjab, Pakistan.