Child labour affects children's health both mentally and physically. There are various psychosocial effects on children who are being involved in labour. This can range from loneliness or depression to severe developmental or mood disorders. The strengths and Difficulties Questionnaire has been used to gauge the extent to which being involved in child labour affects mental health. A sample of 160 children was taken for this research study out of which 40 were Child labourers, 40 were School going Child labourers and 80 were School going non-labourers. Their mental health was measured along the dimensions of the Questionnaire used. Child Labour, School going Child Labour and School going non-labour are the three categories whose mental health has been explored using this screening instrument. After scoring the data was put into statistical analysis and it was found that Child Labour led to higher Behavioral Difficulties. It has been found that Child Labourers undergo higher level of overall stress as compared to School going Child Labourers and School going non-labourers. This has also been found in case of the dimension of Emotional Distress. Thus Child Labour does have an effect on mental health to a large extent; it tells us that Child Labour is a serious problem. There is evidence that it affects the child's mental health. The focus should be on the mental well-being of the child, especially working children and providing a safe and stimulating environment for the child is important. Giving them the ability to integrate into the mainstream of society with the dignity that they deserve and this is possible only if the children grow up to be mentally healthy adults.