Now-a-days, biometric systems have replaced the password or token based authentication system in many fields to improve the security level. However, biometric system is also vulnerable to security threats. Unlike password based system, biometric templates cannot be replaced if lost or compromised. To deal with the issue of the compromised biometric template, template protection schemes evolved to make it possible to replace the biometric template. Cancelable biometric is such a template protection scheme that replaces a biometric template when the stored template is stolen or lost. It is a feature domain transformation where a distorted version of a biometric template is generated and matched in the transformed domain. This paper presents a review on the state-of-the-art and analysis of different existing methods of biometric based authentication system and cancelable biometric systems along with an elaborate focus on cancelable biometrics in order to show its advantages over the standard biometric systems through some generalized standards and guidelines acquired from the literature. We also proposed a highly secure method for cancelable biometrics using a non-invertible function based on Discrete Cosine Transformation (DCT) and Huffman encoding. We tested and evaluated the proposed novel method for 50 users and achieved good results.