The optical properties (photophysics and imaging) of Indian yellow were investigated both in solid state and in aqueous solution and correlated with its chemical composition. The analyses were corroborated by a theoretical study carried out on the different xanthone derivatives that comprise the pigment under investigation, both as isolated molecules and in a polar (protic) solvent, to help the assignment of the excited states involved in the photo-induced process. Knowledge of its relatively high photoluminescence quantum yield (PLQY 0.6%), excitation and emission spectra and lifetime decays enhances the potential for reliable identification using non-invasive photo-induced luminescence imaging techniques. New insights into the chemical composition of the pigment, such as the identification of a sulphonate derivative of euxanthone, and its extensive occurrence on a 17th-century Indian wall painting are also reported for the first time in this study.