ABSTRACT This paper focuses on augmentation of heat transfer and thermal performance factor of tubular heat exchanger by using a novel Perforated Rectangular Cut Twisted Tape (PRCTT) and comparison was made with Plain Tube (PT), Simple Twisted Tape (STT) and Rectangular Cut Twisted Tape (RCTT). Analysis of Nusselt number and friction factor for the twisted tape insert having twist ratio (TR) of 3, rectangular cuts of 2 mm width and 1 mm depth is done. Rectangular cuts of different pitch, that is, 3 mm, 5 mm and 7 mm is used for the analysis. To reduce the friction factor, further analysis has been done with perforation of circular hole in the same RCTT with perforation ratio (d/w) of 0.55 in the core of insert. Numerical analysis shows that in turbulent zone (4000<Re > 16000), highest enhancement in Nusselt number is 2.3 times and highest enhancement of friction factor by 3.2 times with comparison to plain tube when reducing the pitch of rectangular cuts. Perforation further decreases the friction factor by 20%. Highest thermal performance factor is observed 1.48 with the use of Perforated Rectangular Twisted Tape (PRCTT) at Re = 4000.