Shrimp, a globally consumed perishable food, faces rapid deterioration during storage and marketing, causing nutritional and economic losses. With a rising environmental consciousness regarding conventional plastic packaging, consumers seek sustainable options. Utilizing natural waste resources for packaging films strengthens the food industry. In this context, we aim to create chitosan-based active films by incorporating Terminalia catappa L. leaves extract (TCE) to enhance barrier properties and extend shrimp shelf life under refrigeration. Incorporation of TCE improves mechanical, microstructural, UV, and moisture barrier properties of the chitosan film due to cross-linking interactions, resulting in robust, foldable packaging film. Active TCE film exhibits high antioxidant property due to polyphenols. These films also exhibited low wettability and showed hydrophobicity than neat CH films which is essential for meat packaging. These biodegradable films offer an eco-friendly end-of-life option when buried in soil. TCE-loaded films effectively control spoilage organisms, prevent biochemical spoilage, and maintain shrimp freshness compared to neat CH films during refrigerated condition. The active TCE film retains sensory attributes better than neat chitosan, aligning with consumer preference. The developed edible and active film from waste sources might offer sustainable, alternative packaging material with a lower carbon footprint than petroleum-based sources.