Connecting to SQL Server using windows authentication

A connection string for SQL Server should look more like: "Server= localhost; Database= employeedetails; Integrated Security=True;"

If you have a named instance of SQL Server, you'll need to add that as well, e.g., "Server=localhost\sqlexpress"

Your connection string is wrong

<connectionStrings>   <add name="ConnStringDb1" connectionString="Data Source=localhost\SQLSERVER;Initial Catalog=YourDataBaseName;Integrated Security=True;" providerName="System.Data.SqlClient" /></connectionStrings>

Check out www.connectionstrings.com for a ton of samples of proper connection strings.

In your case, use this:

Server=localhost;Database=employeedetails;Integrated Security=SSPI

Update: obviously, the service account used to run ASP.NET web apps doesn't have access to SQL Server, and judging from that error message, you're probably using "anonymous authentication" on your web site.

So you either need to add this account IIS APPPOOL\ASP.NET V4.0 as a SQL Server login and give that login access to your database, or you need to switch to using "Windows authentication" on your ASP.NET web site so that the calling Windows account will be passed through to SQL Server and used as a login on SQL Server.