The main environmental problems associated with water body pollution are typically those caused by the discharge of untreated effluents released by various industries. Wastewater from the textile dye industry is itself a large contributor and contains a huge number of complex components, a wide spectrum of organic pollutants with high concentration of biochemical oxygen demand (BOD)/chemical oxygen demand (COD) and other toxic elements. One of several potential techniques to degrade such reactive dyes before being discharged to water bodies is photocatalysis, and bismuth-based photocatalysts are rapidly gaining popularity in this direction. Bismuth oxyhalides, BiOX (X=Cl, Br, I, F), as a group of ternary compound semiconductors (V-VI-VII), have been explored extensively for their photocatalytic activity due to their unique crystal attice with special layered structure in pure as well as modified form. With suitable band gap and band edge positions, which are a required condition for efficient water breakup and high photon absorption, BiOCl scores over other oxyhalides. Photocatalytic activity depends on many factors such as synthesis method, morphology, size, illumination type, dye choice among others. This paper gives a critical review on bismuth oxyhalides as a family on various aspects of modifications such as doping (with unique and interesting metals as well), morphology and synthesis parameters, polymer and carbon assisted composites in order to further enhance the photocatalytic efficiency in UV/visible region of solar spectrum.