In the present brutal competitive world, security is prime factor to transmit confidential data over the internet. Cryptographic algorithms play very important role in providing the data security against the various attacks. The specific characteristics of image, like high transmission rate with limited bandwidth, correlation among pixels, redundancy and requirement of high storage capacity makes traditional algorithms unsuitable for image encryption. To cross these boundaries for real time applications, design of new algorithms that require less computational power while preserving a sufficient level of security is always a big challenge for researchers. This paper proposes an algorithm based on block based image transformation using perfect shuffle operation followed by new encryption algorithm. In this paper we compare the generated results with available algorithms like AES, RC6 and BFS on the basis of two parameters entropy and correlation.