In this paper, we propose to synthesize realistic underwater images with a novel image formation model, considering both downwelling depth and line of sight (LOS) distance as cue and call it as Realistic Synthetic Underwater Image Generation Model, RSUIGM. The light interaction in the ocean is a complex process and demands specific modeling of direct and backscattering phenomenon to capture the degradations. Most of the image formation models rely on complex radiative transfer models and in-situ measurements for synthesizing and restoration of underwater images. Typical image formation models consider only line of sight distance z and ignore downwelling depth d in the estimation of effect of direct light scattering. We derive the dependencies of downwelling irradiance in direct light estimation for generation of synthetic underwater images unlike state-of-the-art image formation models. We propose to incorporate the derived downwelling irradiance in estimation of direct light scattering for modeling the image formation process and generate realistic synthetic underwater images with the proposed RSUIGM, and name it as RSUIGM dataset . We demonstrate the effectiveness of the proposed RSUIGM by using RSUIGM dataset in training deep learning based restoration methods. We compare the quality of restored images with state-of-the-art methods using benchmark real underwater image datasets and achieve improved results. In addition, we validate the distribution of realistic synthetic underwater images versus real underwater images both qualitatively and quantitatively. The proposed RSUIGM dataset is available here.