Ascites is a very common clinical problem. However, the ability to distinguish malignant from non–malignant and tubercular causes of ascites using various biochemical techniques would obviate the need of many expensive and time–consuming diagnostic studies on patients presenting with ascites of unknown etiology. Therefore, this study was planned to evaluate usefulness of ascitic fluid albumin, protein, SAAG and ascitic fluid cholesterol level in diagnosis of malignant, non–malignant and tubercular ascites. Materials and methods We conducted a prospective observational study in Department of medical gastroenterology, Madras Medical College from time period of January 2018 to December 2018. All cases of ascites of unknown etiology were evaluated and were grouped into malignant and benign ones. Patient having peritonitis were excluded from the study. In this groups, serum albumin,ascitic fluid albumin, cholesterol were done. The data was processed in MS Excel and analysis was carried out using SPSS Ver. 23. Results Out of 80 patients, 30 were malignant (37.5%) and 50 were benign (62.5%).Cirrhosis was the most common cause of benign ascites and carcinoma stomach was the most common cause of malignant ascites. Ascitic fluid cholesterol above the level of 100mg/dl has a specificity of 100% in detecting malignant ascites. Conclusion SAAG, ascitic fluid cholesterol having high specificity, can be used for differentiating between non–malignant and malignant ascites. It can also be used to differentiate tubercular ascites from malignant ascites.