The present disclosure envisages a computer implemented system and method for Wi-Fi based indoor localization. The system includes a repository for storing attributes of the floor plan of an indoor area with respect to the zones on the floor plan. A communicating module receives a threshold number of data points from user devices located in the area. These data points include a plurality of Received Signal Strength Indicators (RSSI) captured from the access points positioned in the area. A k-means clustering is then performed on the data points for grouping the data points into ‘k’ number of clusters and a decision tree is built by following a condition based approach. Distance values are then calculated pertaining to the RSSIs stored at the decision tree, and zone circles are plotted. Zone of user presence is then determined by correlating the plotted zone circles upon the floor plan using maximum overlap property.