Please, help me in caculating my income tax?

I am an employee. My annual pay is 3,00,000.
My employer cuts a certain percentage as TDS.
What is TDS. My friends say that there is some saving Instruments and if i save some amount in those Instruments may save my Income Tax. My employer asks me 'how much i am going to save for the current year'. I have no idea really... Can some one help me how this IT is being calculated.

What is rebate. I dont have an idea on this too.

You can maximum save up to 1 lakh per year u/s 80C. Now your income is 3 lakhs. If you save maximum allowed tax savings (1 lakh u/s 80C), your income will be reduced with 1 lakh. The calculation is given below. Even after full utilization of 1 lakh, you still have to pay tax.

There are other deductions like sec.24. For that you should buy a flat / house and should take loan from a bank or so.

Tax Calcu. for MALE -Tax free Amt. Rs.150000FY:08-09

300,000 = Gross Total income (Regular)
100,000 = LESS: Deductions U/Chapter IV-A (80C Etc.,)
-------------
200,000 = Net Total income after 80C deduction-To be taxed @ slab rates
=======
000,000 = TAX @ 0% Income Exempt from Tax on 150,000
005,000 = Tax @10% between 1.5 to 3.0 lakhs on 050,000
000,000 = Tax @20% between 3 to 5 Lakhs on000,000
000,000 = Tax @30% on >5 lakhs on Rs.000,000
-------------
005,000 = Tax Payable on Net Income200,000
000,150 = ADD: Education cess @ 3% on tax.005,000
-------------
005,150 = Net Total Tax Payable.
=======

More about 80C investments is given in the below web site. Please note that some figures in this web site is old figures Like tax free amount now is 1.5 lakhs. But the web site says 1 lakh because it is 2 years old information. But 80c deductions are correct as there is no change in 80C since 2 years.

http://www.rediff.com/getahead/2005/dec/...

About home loan deductions:
http://www.rediff.com/money/2006/jun/22h...

Well, if you're making 300 thousand a year expect to pay about 100 thousand in taxes.

Its a lengthy procedure to calculate the exact tax you have to pay.
TDS = Tax Deduction at Source.
Tax saving options:
Contribution to PF & PPFund
NSC & BANK FD of over 5 years
Life Insurance policies inc. Mediclaim for self, family & parents.
ELSS in Mutual funds
Children School fees
Pension Plan
Repayment of home loan.
I suggest you seek help from a Tax Consultant.