A method and system for deriving physiological parameters from pulsating signals with reduced error is provided. The method is performed by extracting pulsating signals, removing spurious perturbations in the extracted pulsating signals for smoothening of said extracted pulsating signals, deriving local minima points in the smoothened pulsating signal, deriving systolic maxima point between two derived local minimas, deriving most probable pulse duration and most probable peak-to-peak distance using the derived local minima points and the derived systolic maxima points, deriving dicrotic minima while ensuring that every dicrotic minima is preceded by a systolic maxima point and followed by a beat start point of said systolic maxima, deriving diastolic peak while ensuring that every dicrotic maxima is preceded by a diastolic notch and followed by next beat start point of that maxima and deriving physiological parameters from the derived local minima points, systolic maxima points, dicrotic notch and diastolic peak.
