Commonly used grades for transformer core stampings are Cold Rolled Grain Oriented Steel of grades M3, M4, M5 and M6. As the flux density increases, the magnitude of no load loss and no load current increases. But studies also indicated that, a given magnitude of core loss can be attained with both high and low magnitudes of no load current. This result can be used to ascertain the presence of inferior grade core material. It is essential to operate the transformer in the linear region of BH curve. Operation in saturated state will result in increased no load current which in turn will have a detrimental effect on the temperature rise of transformer as additional I2R losses are generated. With the limits of temperature rise being more stringent in IS standard than in IEC, the choice of flux density is crucial. In this paper an attempt is made to realize the best operational flux density, which gives a benchmark for deciding the magnitude of no load current and the corresponding no load power factor.