In present scenario, India is facing an acute water scarcity. On the other hand there is worst flooding both in urban and rural areas. This has led to serious problems with quality and quantity of ground water and also affecting seasonal crops. To overcome this situation, rainwater run-off diversion or proper drainage system along with rainwater harvesting or storage and reuse has an important role to play in sustaining water resource and to avoid changes due to flooding. This paper puts forward a framework for the economic evaluation of rainwater reuse options integrates with rainwater harvesting, in order to ensure the water resource sustainability for future generations.