Safe potable water and a hygienic living environment are the fundamental needs that promote healthy living. But the massive and continuously increasing consumption of hazardous chemicals, especially carcinogenic dyes such as methylene blue, methyl orange, malachite green, etc., at the domestic and industrial level has led to the lack of potable water sources and ecological problems. It will seriously affect human civilization, sustainable & long-term global development, and the marine environment. Therefore, researchers have focused on more advanced techniques than conventional wastewater treatment methods for the removal/degradation of toxic dyes to address the aforementioned problem. In this study, we have explored the efficient, safe, clean and cost-effective approach for degradation of toxic dyes from wastewater i.e., photocatalytic treatment of dye contaminated wastewater using biomass-derived carbon dots. The green synthesized carbon-dots-based photocatalysts for dye-wastewater treatment have many advantages over conventional methods, such as they are inexpensive, non-toxic, require basic ingredients, exhibit quick reactions, involve easy procedures and straightforward post-processing steps. Hence, this study offers a resource for preserving both human health and the marine environment. The understanding of photocatalytic degradation of dye-contaminated wastewater will also set the stage for future wastewater treatment research. Therefore, the current review provides an overview of recent researches regarding photocatalytic wastewater treatment, respective challenges and future perspectives.