Land Use and Land Cover (LULC) and its change remains a major factor responsible for altering the overall streamflow characteristics and its hydrological behavior. The impact of LULC change on the water balance of the Jhelum River basin has been investigated. Soil and Water Assessment Tool (SWAT) was utilized to compose the hydrological model to study its ramifications on water yield (WY), surface runoff, and evapotranspiration (ET). Landsat-based imagery (for 2002 and 2021), along with different image interpretation methods/softwares, were used for constructing/analyzing LULC maps. The images were first preprocessed and eliminated of various errors, whereas many corrections were already applied in USGS and GEE platforms. Supervised classification techniques, Maximum Likelihood Algorithm (MLA), and Classification and Regression Tree (CART) classifier were used to create LULC maps. After the sensitivity analysis (global sensitivity analysis), ten LULC classes were selected (urban, agriculture, horticulture, forest, scrub, plantation, water, river bed, glacier, and rocky outcrop), with the overall accuracy of 87.31% and 89.63% and kappa coefficients of 85.64% and 88.48% for years 2002 and 2021 respectively. The LULC trends showed that the urban and horticultural area increased by 0.77% and 2.28%, whereas the agricultural and forest area decreased by 2.28% and 3.41%. The parameters PLAPS, TLAPS, CN2, GW_DELAY, SFTMP, and CANMAX were ascertained to be among the most sensitive. Calibration and validation of the model were done using the IFC datasets of monthly runoffs from 2005 to 2017 and 2017 to 2021 respectively. The Nash-Sutcliffe efficiency coefficient (NSE) for calibration and validation was 0.78 and 0.76 respectively, whereas the determination coefficient (R2) was 0.80 and 0.78 respectively. At the catchment scale, it was observed that the increase in the horticultural area had enhanced the ET while reducing WY and surface runoff. The main findings were that the basin WY was found to be decreased by 51.1 mm/year and ET increased by about 12.3 mm/year. It can be concluded that the combined effect of an increase in the horticulture and the dominant forest cover of the Jhelum basin has led to the increase of base flow and ET due to an improved rate of infiltration and transpiration.