Palynological and petrological studies have been undertaken on the Gondwana coal and associated lithologies encountered in borehole EBM-2 of East Bokaro coalfield of Damodar Basin, India. The palynological investigation resulted in the recognition of Assemblage-III (Densipollenites, 27.9 m-214.30 m), Assemblage-II (Striatopodocarpites + Faunipollenites, 225.00 m-297.60 m) and Assemblage-I (Faunipollenites + Scheuringipollenites, 307.00m-433.00 m). Lithofacies study was also done for better understanding of the preservation and abundance/paucity of the spores and pollen in different lithologies as the current borehole has significant thickness of mudstones, shales and siltstone. Palynofacies study and Petrographical studies of coal samples encountered in the borehole were used to determine the depositional environment of the coal precursor peat swamp. Palynological data has revealed the presence of younger Raniganj palynoflora between 27.00-214.30 m depth that is lithologically defined as Barren Measures Formation. This spore pollen study has proved that these sediments were deposited during late early Permian to late Permian period. Further the maceral analysis of organic sediments as well as the Thermal Alteration Index (TAI) has revealed that the coaly shale at 336.5 m depth has hydrocarbon generation potential.