Spatial heterodyne spectroscopy (SHS) is an interferometric technique similar to the Fourier transform spectroscopy with heritage from the Michelson interferometer. An imaging detector is used at the output of an SHS to record the spatially heterodyned interference pattern. The spectrum of the source is obtained by Fourier transforming the recorded interferogram. The merits of the SHS—its design, including the absence of moving parts, compactness, high throughput, high SNR, and instantaneous spectral measurements—make it suitable for space as well as for ground observatories. The small bandwidth limitation of the SHS can be overcome by building it in tunable configuration [tunable spatial heterodyne spectrometer (TSHS)]. We describe the design, development, and simulation of a TSHS in refractive configuration suitable for optical wavelength regime. Here we use a beam splitter to split the incoming light compared with all-reflective SHS where a reflective grating does the beam splitting. Hence, the alignment of this instrument is simple compared with all-reflective SHS where a fold mirror and a roof mirror are used to combine the beam. This instrument is intended to study faint diffuse extended celestial objects with a resolving power above 20,000 and can cover a wavelength range from 350 to 700 nm by tuning. It is compact and rugged compared with other instruments having similar configurations.