Abstract. This paper deals the application of Continuous Wavelet Transform (CWT) and Euler deconvolution methods to estimate the source depth using magnetic anomalies. These methods are utilised mainly to focus on the fundamental issue for mapping the major coal seam and locating magnetic lineaments. These methods are tested and demonstrated on synthetic data and finally applied on field data from Jharia coal field. Prepared magnetic anomaly map that reflects clear tectonics control and nature of the underlying basement, demarcation of the basin, geological faults by steep gradients of magnetic anomaly. Analysis suggests that the CWT have a great utility in the magnetic data interpretation and the correlation between magnetic anomalies and geological features such as faults/joints and intrusive bodies over the basin. The CWT provides the consistent and reliable depth of the underlying basement with the results of Euler deconvolution and Tiltdepth methods without any priory information that is correlated well with borehole samples (Raja Rao, 1987). One of the fundamental issues is to detect differences in susceptibility and density between rocks that contain ore deposits or hydrocarbons or coal. These differences are reflected in the gravity and magnetic anomalies and also delineation of structural features, which are interpreted using several techniques (Blakely and Simpson, 1986). One of the most important objective in the interpretation of potential field data is to improve the resolution of underlying source, delineating lateral change in magnetic susceptibilities that provides information not only on lithological changes but also on structural trends. Especially, mapping the edges of causative bodies is fundamental to the application of potential field data to geological mapping. The edge detection techniques are used to distinguish between different sizes and different depths of the geological discontinuities (Cooper and Cowan 2006, 2008; Perez et al. 2005; Ardestani 2010; Hsu et al. 1996, 2002; Holschneider et al., 2003). The derivatives of magnetic data are used to enhance the edges of anomalies and improve significantly the visibility of such features. Sedimentary layer dominates the gravity and magnetic signature over Jharia Coal field (Verma et al., 1973, 1976, 1979). Thus the difference between the depths estimated using Euler deconvolution method (EDM) (Thompson 1982; Reid et al. 1990) and Tilt Depth Method (TDM) technique (Salem et al., 2007; Cooper 2004, 2011) may help to detect the thickness of the coalbed. Wavelet transform and Euler deconvolution method has been theoretically demonstrated on magnetic data. These methods provide source parameters such as the location, depth, geometry of geological bodies and interfaces in an easy and effective way. However, it may be more difficult to characterize the source properties in cases of extended sources (Sailhac et al., 2009). These methods executed over Jharia coal field, Dhanbad, India. This area forms an east west trending belt of Gondwana basin of Damodar valley at the north eastern part of India. This study region is mostly coal rich area of Gondwana basin. Analysis on Jharia coal field suggests that the magnetic anomalies provide encouraging results which are well correlated with available gravity data and some borehole informations.