onchange file input change img src and change image color

You need to send this object only instead of this.value while calling onchange

<input type="file" id="upload" onchange="readURL(this)" />

because you are using input variable as this in your function, like at line

var url = input.value;// reading value property of input element

Working DEMO

EDIT – Try using jQuery like below —

remove onchange from input field :

<input type="file" id="upload" >

Bind onchange event to input field :

$(function(){
  $('#upload').change(function(){
    var input = this;
    var url = $(this).val();
    var ext = url.substring(url.lastIndexOf('.') + 1).toLowerCase();
    if (input.files && input.files[0]&& (ext == "gif" || ext == "png" || ext == "jpeg" || ext == "jpg")) 
     {
        var reader = new FileReader();

        reader.onload = function (e) {
           $('#img').attr('src', e.target.result);
        }
       reader.readAsDataURL(input.files[0]);
    }
    else
    {
      $('#img').attr('src', '/assets/no_preview.png');
    }
  });

});

jQuery Demo