Context: The incidence of pleural effusion is approximately one million per year. For diagnosing and treatment plan, pleural effusions have to be classified into transudate and exudate. If the diagnosis is not appropriate, it may result in severe complications. The established criterion for differentiating exudates from transudates is Light's criteria. But there were some false positive results in case of transudative effusions when Light's criteria were used. Aims: This study was done to determine the accuracy of serum effusion albumin gradient (SEAG) when compared to Light's criteria in differentiating transudates and exudates. Settings and Design: It is a prospective observational study. In the present study, the sample size is 66 patients, in whom the SEAG was used for the classification of pleural effusions with a cut-off value of 1.2 g/dl. Methods and Materials: All the blood samples were collected and biochemical parameters like total protein, albumin, and LDH were analyzed in both serum and pleural fluid using XL 640 fully automated random access analyzer. Statistical Analysis Used: Results were analyzed using SPSS software version 20. Results: 20 of 22 transudates and 41 of 44 exudates were classified correctly using SEAG. The diagnostic accuracy of SEAG (92.42%) is better than Light's criteria (87.87%) in differentiating both transudative and exudative effusions. Conclusions: The SEAG is superior to Light's criteria in identifying the transudative effusions. It is also observed that Light's criteria identified exudative effusions better than SEAG.

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