Arsenic is considered one of the most hazardous trace metals in groundwater researched to date because of the hazardous impacts like cancer, skin irritation, and other skin‐related diseases. The present study involved collecting 60 water samples from Bhagalpur district, Bihar, India, to estimate the arsenic concentration. The human health risk assessment of the samples concerning children and adults was also performed, and the maximum concentration of arsenic was found to be relatively high in some sample sites. Prolonged exposure to arsenic could be fatal to the local population. The current study also focuses on developing a low‐cost paper‐based arsenic detection kit. The paper‐based test kit was tested for parameters like color development for different forms and concentrations of arsenic, storage conditions for the test strips, the effect of different interfering agents on color development, and optimization of the AgNO3 solution. The cost analysis was carried out, and it was found that the kit would cost 0.046 USD per sample, which is 70–100 times lower than the cost of current methods.