Groundwater balance helps assessment of groundwater sustainability at the current rate of its use. The estimate is specific to the area and time reference of its estimation. Dynamic groundwater head which relates to the change in storage is an important parameter in the resource estimation. In case, the observation boreholes tap aquifers different from the getting abstracted, the estimated results may deviate drastically from its true value. Multiple aquifer system exists in the northern part of district Amritsar, Punjab, India for which the water level trends of representative well hydrographs in the region for the period January 2006 to December 2013, show moderate sustainability. Taking the case of Amritsar district of Punjab, it has been shown in the present study that if the aquifer details are not considered appropriately, the moderately sustainable groundwater system can get assessed as over-exploited aquifers. In the study, groundwater quality for irrigation needs is also been examined.