The story focuses on Aman Sharma a.k.a. Banku
( Aman Siddiqui ), who has recently shifted into an old
bungalow in Goa , with his parents, Aditya ( Shah Rukh
Khan ) and Anjali ( Juhi Chawla ). His father Aditya is
an engineer on a cruise line, and therefore moves
with his cruise. They are made aware that the
bungalow is haunted, but they disregard this. Banku
is enrolled in St. Francis High School , and Anjali hires
a kindhearted and comedic drunken thief, Anthony
( Rajpal Yadav ), as a servant to clean the house. One
night, Banku goes down to the living room to have
some ice-cream when he sees a shadow on the wall.
Frightened, he calls out to his mother, before seeing
that the bowl in which he was having ice-cream has
vanished. Later, Banku returns and passes a sleeping
Anjali to investigate. He then sees the ghost of
Kailash Nath ( Amitabh Bachchan ) and then they start
arguing on whether Kailash is a ghost or an angel
(according to Banku, who constantly persists that
Nath is an angel rather than a ghost). Banku
nicknames him Bhootnath as Kailash says that he is
a bhoot ( ghost ) and also says that Nath is his last
name.
Since the ghost of Kailash does not want anybody to
occupy his house, he tries different ways to scare
Banku and his mother, but Banku considers him as
angel and treats him like a friend. Soon, Bhoothnath
accepts by Banku's innocent love after a minor
incident, as Banku fell from the stairs for which
Bhoothnath is in fact responsible for.
The two become friends and thoroughly enjoy the
company of one another. It is at this point that
Bhoothnath's son returns from the United States and
plans to sell off the bungalow. Angered, Bhoothnath
scares the buyers, but Anjali comes to know the
existence of him. He then tells his story to Banku and
Anjali about how his son deserted him at a time of
need for him, along with the story of his death.
Later, Aditya and Anjali decide to perform the final
rites of Bhoothnath to give him Moksha. It is
performed by Banku and Bhoothnath bids an
emotional farewell to Banku. By this time,
Bhoothnath's son also comes to know of his fault
and apologizes.
In the end, Banku, who is sad that Bhoothnath is no
more, sees Bhoothnath again, who says that he is
always there for him and makes Banku promise not
to tell his parents about his return and also requests
the viewers the same in the post credits scene.