This paper deals with the computation of overvoltage in a 220 kV line as well as at important locations of the associated substation caused by the lightning, especially, in the event of direct stoke to the line’s phase conductor. Comparison of the voltages at various locations of the substation with and without the presence of the lightning protecting system is also carried out. The computations have been carried out using the Electromagnetic Transient Program. Simulation results for the case of without the presence of lightning arrester anywhere in the system showed the obvious very high lightning over voltages at all locations of the system. The results of the case study with the presence of 216 kV lightning arrester only at line terminal (at substation entry) showed that over voltages occurring across all the substation equipment are within the accepted protection margin of 25% with reference to their BILs. However, inadequacy of this protection margin for transformers, prompted use of lightning arresters at its HV terminals also. Computation results of this case study showed the new protection margin 37% for the transformer which is more than the requirement of 30%. It is inferred that lightning arrester on HV side of the transformer is a must for avoiding failure of insulation of transformer due to lightning striking the connected transmission line. The full paper describes the system considered, its modelling in EMTP, study methodology, results of case studies and inferences drawn.