We demonstrated heat generation efficiency of the magnetic hyperthermia system to find optimal condition using gelatin tissue phantom. Magnetic hyperthermia induction can be used to make heat generation with different concentration of $Fe_3O_4$ iron oxide inside tissue phantom and magnetically labeled cells by applying AC magntic field at a frequency of 145 kHz. It was observed that the maximum temperature achieved in the magnetic gelatin tissue phantom increased with the concentration of $Fe_3O_4$ iron oxide and alternating magnetic field intensity. Results were discussed with respect to further optimization of therapeutic technique for biomedical application with modified functional nanoparticles.