In urban areas the water supply to residence and commercial establishments are provided at a fixed flow rate. There are incidents of excess water drawn by certain customers/users by connecting motor-pump sets to the waterlines which is considered as water theft. In this project it is proposed to develop an embedded based remote water monitoring and theft prevention system by recording the flow rates at the consumer/user end. In order to implement the proposed water supply system, each consumer should be provided with an embedded based water flow monitoring system consisting of a microcontroller to record the flow rate using a flow sensor and to transmit the same to a remote monitoring station using wireless transmitter and it is also provided with an electrically operated solenoid valve to supply water to the consumers. The valve turns on/off to stop the water supply whenever the flow rate exceed a predefined limit. The solenoid valves are also controlled using real time clock to control flow of water accordingly for a fixed duration of time. It is proposed to employ a gsm modem for wireless communication so that the information can be passed to particular responsible officer‟s cell phone for immediate action.One of the world's major problems is the scarcity of water, mainly due to the unmeasured consumption and the waste of this vital element. This project describes a modular water system, which helps not only in monitoring consumption but also in finding water pollution. In the past water resources were very limited & nobody can afford its wastage. For managing and providing water so many workers were required. Also to switch on valve & distribute water bill by going to home so many workers were required. To overcome this problem we have decided to work on automatic water management using microcontroller (atmega 328p). Also this project deals with problem of distributing water bill in different area by going to every user’s home. We have decided to use GSM module for communication. In this project we will make a PYTHON based management software which will handle user account details.