Lately myoelectric prosthetics are in use. But it has certain disadvantages like it relies on the nerves to be undamaged and it's very expensive, which can be overcome by EEG-based brain controlled prosthetic arm. EEG-based brain controlled prosthetic arm is a non-invasive technique that can serve as a powerful aid for severely disabled people in their daily life, especially to help them move their arm voluntarily. In this paper, EEG-based brain controlled prosthetic arm has been developed using BCI with the help of Neurosky Mindwave headset to yield the two main movements of fingers in the arm: Flexion and Extension. BCI system consists of an EEG sensor to capture the brain signal, which will be processed using ThinkGear module in MATLAB. The extracted brain signals act as command signals that are transmitted to the Microcontroller via RF medium. The prosthetic arm module designed consists of Arduino coupled with servo motors to perform the command. The flexion and extension of finger can be successfully controlled with an accuracy of 80 per cent. The low cost wireless BCI system could allow the disabled people to control their prosthetic arm to lead a self-reliant life with the help of their brain signals.