Digital protection has several advantages over conventional protection scheme. For protecting costliest and vital equipment such as transformer, digital schemes have been proposed by several authors in recent past. This paper throws light on allsuch efforts and it will help researchers to focus on integrated efforts to protect transformer in a better and efficient way. Artificial intelligence along with signature and pattern recognition techniques give much more useful information about happenings in and outside of transformer. Efforts are put by all concerned with Fast, accurate, flexible, reliable and easy to understand scheme of protection. With the advent of soft computingmethods condition monitoring with protection has become on line objective. Keeping all these state of art techniques of protection, this paper will be a useful resource.Discrimination of several faults external and internal needs digital signal processing and feature extraction as well. Many algorithms are proposedas summarizedin paper