Background The occurrence of adverse drug reactions with chemotherapy among cancer patients is a well-documented phenomenon. However, the understanding of contributoring factors and their influence on the severity of adverse drug reactions is incomplete without the psychosocial factors affecting them. Objective The present study was done to understand if factors like Health literacy and cognition levels have an association with the severity of adverse drug reactions of cancer chemotherapy. Setting This study was done in the Department of Medical Oncology in a tertiary care hospital in India. Method Two hundred and twenty-four patients meeting the study inclusion and exclusion criteria took part in the study. Details of adverse drug reactions were collected as per the central drugs standard control organization format and severity of adverse drug reactions assessed with National Cancer Institute common terminology criteria of adverse events, version 5.0. Health Literacy and Cognition Levels of patients were assessed using standardized questionnaires, i.e., Short test of functional health literacy in adults and short portable mental status questionnaire, respectively. Data were anonymized and analyzed using Statistical Package for Social Sciences version 16.0 software. Pearson’s Chi square test (p value ≤ 0.05 was considered statistically significant) was used to study the associations. Main outcome measure The associations of Health Literacy and Cognition Levels with the severity of adverse drug reactions. Result We found that both Health Literacy and Cognition Levels had a statistically significant association with Grade 3 and above adverse drug reactions in cancer patients receiving chemotherapy. Conclusion An initial assessment of Health Literacy and Cognition Levels in cancer patients by cancer care providers can help identify patients at high risk of developing severe adverse drug reactions. Interventional measures for improving Health Literacy by healthcare providers can help reduce the overall burden of disease on the patient due to adverse drug reactions.