In this paper, the authors present a design of efficient digital Vedic multiplier using the Vedic sutras from ancient Indian Vedic mathematics. If they are looking towards the signal processing, they will find multipliers and adders plays a very important roll. In fact if they make their focus they can see speed of the digital signal processing systems is mainly dependent on multipliers and adders. A processor requires more hardware and processing time during multiplication rather than addition and subtraction. In this paper, they proposed a new digital Vedic multiplier structure based on a new encoding algorithm.