Phoonk is based upon the concept of black magic. Civil engineer and atheist Rajiv (Sudeep) lives in Mumbai with his wife Aarti (Amruta Khanvilkar) two kids, Raksha (Ahsaas Channa) and Rohan (Shrey Bawa), Rajiv's mother and the housemaid Laxmi(Anu Ansari). Rajiv's most trusted colleagues are Anshuman (Kenny Desai) and Madhu (Ashwini Kalsekar), whom everyone, including Rajiv's friend Vinay and Raksha feel are not normal. During a party at his house, when he comes to know that the husband and wife duo have cheated him on a valuable contract for an IT firm in Delhi, Rajiv fires both of them after insulting them both. Humiliated and angry at this, the two of them decide to take revenge on Rajiv. Madhu notes that Rajiv is very fond of Raksha.