Harmonics and Harmonics limit
Harmonics stand for the unwanted AC signals or disturbances in the AC supply. In technically speaking, the fundamental AC component (e.g. 200 Hz) in the main supply comprises of 2,3,4.. times that of fundamental frequency signals (400Hz, 600Hz, 800 Hz...). The fundamental AC component is normally a pure sinusoidal signal. The Harmonic component's magnitude will be of less in amplitude compared with fundamental.
Fundamental and harmonic components (courtesy: online source)
Source of harmonics:
When the non linear loads such as UPS, chargers, Computers etc. are connected with the main supply, harmonics are generated.
Effects of harmonics:
Due to harmonics the power losses in the line increase, poor power factor etc.
Harmonic limits:
Voltage harmonics i.e. THD level should be < 5%
for current harmonics the THD level should be <8%
Otherwise the Electricity board may impart penalty for the amount of harmonics generated.