In the past few decades, extensive research work has been conducted to elucidate the thermo-physical and rheological properties of nanofluids. The studies focusing on optical properties of nanofluids are limited and require a substantial amount of work in this area. Nanofluids can either absorb or transmit specific solar spectrum and thus making assorted nanofluids ideal candidates for various solar applications. The present study aims to provide a comprehensive review on the latest developments related to solar spectrum absorbance, transmittance and scattering characteristics of nanofluids for potential applications in solar spectrum splitting. The influence of numerous factors (nanoparticle size, nanoparticle shape, concentration of nanoparticles, temperature, surfactant and optical path length) on solar spectrum absorbance, transmittance and scattering characteristics of nanofluids are reviewed and discussed in detail. Present and potential applications of nanofluids as solar spectrum splitters are also mentioned. Mathematical expressions and models used in the reviewed studies for calculation of optical properties are also compiled. Most of the studies agreed that augmentation in nanoparticle size and concentration can enhance the optical absorption of nanofluid. Optical path length played a significant role in the radiative absorbance of nanofluids. The transmittance deteriorated with an increase in optical path length, size and concentration of nanoparticles. The scattering phenomenon was remarkable for nanoparticles having a size greater than 50 nm. The agglomeration of nanoparticles can strengthen the scattering and thus increase the extinction coefficient.