Over the years there has been a tremendous increase in the number of automobiles and parking is the major issue that affects our daily life. Difficulty in parking vehicles leads to stress, wastage of time and fuel. Research shows that people have tob travel more that 500 meters in search of a parking lot. We are introducing a simple and efficient smart parking system to tackle this problem. Our system divides the parking area into different slots. As the name suggests, when any vehicle enters the allotted slot the lights that display the slot is vacant(green) is turned to engaged position(red). The color of the light changes when a vehicle comes in front of the sensor, it sends a signal and immediately changes the color from green to red. Also we have set up an LCD display outside the parking lot to find out the free parking space easily. The biggest advantage is that we save the fuel, time and money and can avoid accidents and unnecessary disputes among the people.