This research work defines the various techniques used for information hiding, their applications and also discusses the drawbacks of implementing those techniques independently. The motivation for this work includes provision of protection of information during transmission without any detection of information. In the present work, it has been observed that steganography is the solution for given problem as in this technique, existence of data is not evident. Among various types of steganographic techniques, image steganography is best solution. Thus, a new image steganography scheme based on Effective Channel Selection Technique for Encoding and Decoding of Data has been proposed. The proposed scheme can encode any colored image files as well as gray-scale image files in order to protect confidential text data from unauthorized access. A PSNR calculator tool has been used for measuring the image quality factors. Further, these quality parameters have been used to generate graphical outputs and tabular values for comparison with the best known image steganographic techniques.