The versatile applications of coumarin derivatives in materials processing, fluorescence imaging, data storage, and photodynamic therapy have sparked considerable interest in scientific community. In this research paper, we explore the UV–vis spectra, IR spectra, and two photon absorption (TPA) characteristics of biological active coumarin derivatives under the influence of electron withdrawing (specifically X = CONH2, CHO, and NO2) and electron donating (X= -CH3, -OH, -NH2) functional groups at C-4 position. To delve into the absorption spectra, we employ time-dependent density functional theory calculations. Results revealed that acceptor functional groups (specifically R = CONH2, CHO, and NO2) not only lower the energy of the lowest two photon active state but also increase the corresponding TPA cross-section. Furthermore, using the Conductor-like Polarizable Continuum Model (CPCM), the influence of solvent polarity on C-4 substituted coumarin derivative was also investigated. Our findings effectively capture how substitutions and solvents impact the nonlinear optical response in coumarins, as evidenced by the measurement of the two-photon absorption cross-section (σTPA). This study offers valuable insights for identifying and designing novel coumarin derivatives with C4 substitutions, unlocking new and intriguing possibilities for their practical applications.