The protection of multimedia data is becoming very important. The protection of this multimedia data can be done with encryption or data hiding algorithms. To decrease transmissions time the data transmission necessary. Recently, more and more attention is paid to reversible data hiding (RDH) in encrypted image. It maintains original area could be perfectly restored after extraction of the hidden message. In previous method embed data by reversibly vacating area from the encrypted images, which may be subject to some errors on data extraction and/or image restoration. A novel method by reserving area before encryption with a traditional RDH algorithm, and thus it is easy for the data hider to reversibly embed data in the encrypted image. The proposed method can achieve real reversibility, that is data extraction and image recovery are free of any error. The hidden data can be retrieved as and when required. The methods that are used in reversible data hiding techniques like Lossless embedding and encryption. This deals with the image steganography as well as with the different security issues, general overview of cryptography approaches and about the different steganography algorithms like Least Significant Bit (LSB) algorithm [15], JSteg, F5 algorithms. It also compares those algorithms in means of speed, accuracy and security.