Capsule endoscopes are effective diagnostic tools for the gastro intestinal tract disorders at patient's comfort. However the present capsule endoscopes lack efficient localization techniques to specify a pathological area that may require further diagnosis or treatment. This paper presents the development of a tagging module based novel method for the real-time localization of the site of interest. The tagging module consists of a bio compatible micro tag, compressed spring with a string latch and thermal igniter. The module can be integrated with the capsule endoscope and activated using an external trigger signal. On activation, the micro tag releases instantly and penetrates the mucosa layer of GI tract, region of interest. X-ray imaging is used to detect the location of micro tag embedded in GI tract wall. The radiopaque micro tags provide pre-operative valuable position information of the infected area to facilitate further clinical procedures.