Due to mounting environmental and public health concerns about the toxicity of Arsenic (As) contamination, there is a strong drive to develop cost-effective sensors and adsorbent material for As. Using density functional theory, we examined the adsorption mechanism, electronic structure, and optical absorption spectra of SWCNT with atomic As and Arsenous acid (H3AsO3). Results indicate that atomic As can strongly interact with SWCNT with significant structural deformation of the SWCNT upon adsorption. This bonding creates modification on the intrinsic electronic structure and the optical absorption spectra of the prototype SWCNT. Hence, SWCNT is an efficient adsorbent and a candidate material for sensing atomic As. On the other hand, H3AsO3 interacts weakly with the SWCNT, with no significant modification observed in the SWCNT's atomic configuration, electronic structure, and optical absorption spectra. The interaction and sensitivity with H3AsO3 significantly improved after doping the SWCNT with Fe. The changes in the band structure patterns and optical absorption spectra of Fe-doped SWCNT is also observed upon exposure to H3AsO3. The results presented here provide fundamental insights into the interaction of SWCNT and As, which serve as a reference for fabricating SWCNT-based adsorbent and sensing platforms of heavy metals. The results further explore how metal-doped SWCNT tunes the bonding and sensitivity with heavy metals.