The 49-year-old author was killed outside her home in Paktika province.
According to BBC reports, the miscreants arrived at her home and tied up her husband and other family members. They took Banerjee out and shot her.
Her body was reportedly dumped near a religious school.
No group has claimed responsibility for the attack.
She was married to an Afghan businessman Jaanbaz Khan.
She had penned down her experience with her husband in Afghanistan and her dramatic escape in 1995 in a book called "Kabuliwalar Bangali Bou" (A Kabuliwala's Bengali Wife).
The book became a best-seller in India and was made into a Bollywood film called "Escape From Taliban" in 2003.
Banerjee had recently moved back to Afghanistan to live with her husband.
--IBNS (Posted on 05-09-2013)