There is a growing demand for a high brightness light source with short pulse length among the researchers in the field of physical, chemical, biological and medical sciences in India. To cater to the experimental needs of multidisciplinary sciences, a project to develop a compact Light Source has been initiated at Inter University Accelerator Centre (IUAC). In the first phase of the project, pre-bunched electron beam of ∼ 7 MeV energy will be generated by a photocathode RF gun and coherent THz radiation will be produced by a short undulator magnet. In the next phase, the energy of the electron beam will be increased up to 40 MeV by a pair of superconducting niobium resonators. The coherent IR radiation will be produced by using an undulator magnet (conventional method) and X-rays by Inverse Compton Scattering. To increase the average brightness of the electromagnetic radiation, fabrication of superconducting RF gun is going to be started in a parallel development. In this paper, the design of the accelerator system and the plan of producing THz radiation will be discussed. Copyright © 2014 CC-BY-3.0 and by the respective authors.