Methods and systems for providing multi-layer reversible data hiding are disclosed. According to the methods and systems, multi-layer reversible data hiding process may be implemented in two stages. The first stage provides embedding of the sensitive data on a secret layer and hiding the secret layer behind single or multiple layers for secure transmission for intended recipient. Subsequently, the second stage is concerned about retrieving or extracting the hidden sensitive data through proper authentication. In the extraction process, the recipient needs to provide the right authentication code for each of embedded layer in order to reach to the secret layer. Upon unsuccessful authentication of any embedded layer, the proposed method enables an intelligent security technique termed as SMART (Suspect Malicious Activity on Rich Tract), which ensures to protect the sensitive data by suspecting the attempts of theft and intrusion.