This study focuses on evolving an integrated water management plan (IWMP) for Shimla City (erstwhile summer capital of British India). Presently it is the state capital of Himachal Pradesh. Total water demand (2014) is 58.46 million litres per day (MLD) against system capacity of 54.54 MLD. The present deficit of 3.92 MLD (2014) may amplify to 59.01 MLD in 2051. Resource assessment in the related watersheds namely, Ashwani, Nauti, Giri and Pabbar accomplished using remote sensing techniques and geographic information system (GIS) based Arc-SWAT hydrological model. Average annual precipitation in all watersheds for 26 years (1984-2010) is about 1,005 mm, out of which about 34% flows as runoff, 8% as groundwater and about 58% as evapotranspiration. Being ungauged watersheds, water balance equation considered as the validation criteria, coefficient of correlation 'R' between observed rainfall and simulated runoff varies from 0.94-0.96. Results further validated through actual measurement of inflow in lean period in one of the major sources, i.e. Giri River, which has shown very good correlation (R = 0.95) between simulated and observed stream flow. The study establishes that existing sources are not sustainable. IWMP suggests, source augmentation coupled with rainwater harvesting and reuse of wastewater as long-term strategic measures.