I often hear others say that watching TV is Haram. My question is, for drama in which men and women all are in normal clothes, meaning they are not naked, nor are there any nude scenes, and with a great story, is watching this type of drama also Haram? are there any authentic/reliable sources which supports it is Haram?
Asking "Is watching Drama haraam?", is like asking "Is a pencil haraam?" where both questions can't be answered unless the questions are given further direction, as in their current state, are too general and can't be answered with any useful meaning.
For example: Is a pencil haraam? No, but it can be used for haraam! Therefore, using that style of thought, I have tried to give your question some much needed direction to make it more of a valid question. Keeping all that in mind, please read the answer below.
Please note that this answer is not about looking at non-covered men/women, it's about looking at covered and/or appropriately dressed men/women, which is me trying to add further direction to the question asked as explained above.
We know that we have been told to lower our gaze. The prophet of Islam would lower his gaze when women would pass in camel-borne sedan chairs, i.e. he would lower his gaze even when he could hardly see the women as they were covered in sedan chairs:
In Saheeh Muslim (1218) it is reported that Al-Fadl ibn ‘Abbaas (may Allaah be pleased with him) was riding behind the Messenger of Allaah (peace and blessings of Allaah be upon him) on the Day of Sacrifice (Yawm al-Nahr) from Muzdalifah to Mina, when some women riding on camel-borne sedan chairs passed by. The Messenger of Allaah (peace and blessings of Allaah be upon him) turned his [al-Fadl’s] head away. This was prevention and denunciation through action, for if looking were permissible he would have approved of what he did.
Here is an example of what sedan chairs probably looked like in those days considering the required cover from the burning desert sun:
We also know that both men and women have been told to lower their gaze:
“Tell the believing men to lower their gaze (from looking at forbidden things), and protect their private parts (from illegal sexual acts). That is purer for them. Verily, Allâh is All-Aware of what they do. And tell the believing women to lower their gaze (from looking at forbidden things), and protect their private parts (from illegal sexual acts)” [al-Noor 24:30-31].
So, it doesn't really seem to matter if they are wearing "normal cloths" or revealing cloths, it seems you should be lowering your gaze no matter how well covered the opposite gender is.
Therefore, if you're male and the drama you watch does not have females, and if you're female and the drama you watch has no males, then it "might" be all good. However, all I can really say is, watch at your own risk.
Even if the people are "modestly dressed" (I'm assuming non Muslims and Muslims on TV) you are looking at the face of the opposite sex and may/will find the face attractive. Scholars even say watching the news with a female presenter is not allowed never mind dramas! You have other options wait until it's a male newsreader, read a newspaper, listen to the radio etc. if you miss the news does it mean you are missing out?
Islam being a global and last religion elaborates wider principles in which characteristics of both Halal and haram are clearly defined. After given broader principles the way of ijtihad is advised by ou religion by which with the collective wisdom of renowned islamic scholars of the time, decisions can be be made on all on going emerging and future issues in the context of haram & Halal boundaries. This way of taking decision is available in Hadith and will remain enforced till the end of this universe. If we evaluate watching of drama or movie in same parameters than it can be easily decided that if available texture in drama / movie fulfills criteria of Halal properties as i have seen a movie named The Messenger and few dramas in which islamic history is shown with all pre requisites of Islamic clothing, these types of films/movies are not Haram for Muslims. Likewise the movies / dramas of current productions having a texture of evil and indecency are not permissible in islam being containing haram texture..