Chasing 173 to win, India were led by a swashbuckling knock of 72 not out by Virat Kohli as they strolled to the tagret with five balls to spare.
This becomes India's second final in five World Twenty20s after they won the inaugural event held in South Africa in 2007.
They will battle with Sri Lanka in the final in Dhaka on Sunday for the World T20 trophy.
In contrast, South Africa, regarded as perennial chokers in crucial matches, yet again failed to reach any world level final since their readmission into cricket in 1991.
Kohli smashed five boundaries and two sixes off 44 balls in a brilliant display of batting, highlighting India's strength at chasing a target.
He hit paceman Dale Steyn for a boundary to seal the win much to the jubiliation of a packed Shere Bangla stadium.
Kohli and other Indian batsmen blunted South Africa's best bowlers, leg-spinner Imran Tahir -- joint highest wicket-taker so far in the tournament with 12 -- and paceman Steyn with authority.
Tahir managed just one wicket for 30 runs in his four overs while Steyn went for 36 in 3.1 overs.
Kohli brought up his seventh T20 fifty with a huge six off Tahir and despite the loss off Yuvraj Singh (18) and Suresh Raina (21) kept the run-chase smooth.
Rohit Sharma made a 13-ball 24 with a six and four boundaries and Ajinkya Rahane scored 32 off 30 balls.
South Africa, who batted after winning the toss were helped to 172-4 with skipper Faf du Plessis scoring a 41-ball 58 for his fifth Twenty20 fifty.
He added 71 for the third wicket with Jean-Paul Duminy who made an unbeaten 40-ball 45 to bolster the innings.
Du Plessis, who missed South Africa's last game against England because of a slow over-rate suspension, hit five boundaries and two towering sixes as the duo negotiated an Indian spin quartet with aggressive batting.
South Africa lost opener Quinton de Kock (six) in the first over before Hashim Amla and Du Plessis took the score to 44 in the fifth over.
But Ravichandran Ashwin, who took 3-22 in his four overs, put the brakes on South Africa's progress, claiming Amla (22) and then dangerman AB de Villiers (ten) off a miscued pull shot which was smartly held by Rohit Sharma at long leg.
In between du Plessis and Duminy batted with guts to take South Africa to 115 before Ashwin bowled du Plessis off a miscued sweep.
Duminy, who hit three sixes and a four, added another 43 for the unbroken fifth wicket with Andrew Miller (23 not out) to help South Africa add 106 in the last ten overs.
Leg-spinner Amit Mishra, India's most successful bowler in the Super-10 stage, went for 36 runs in his three overs without taking a wicket.
COMMENTS (31)
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@Afsoos Khan: What a hateful, pathetic man you are, water bottle. No wonder we Pakistanis are such losers in the world in every respect. . Afsoos ji, I think this water bottle guy is a fellow Indian, one of those sadists type though :D May be some of us can learn from Captain Dhoni. He used his clout to get a Pakistani fan, the ticket to watch the final match:
http://timesofindia.indiatimes.com/sports/cricket/series-tournament/t20-world-cup-2014/top-stories/Skippers-Pass-Dhoni-arranges-World-T20-final-ticket-for-Pakistani-fan/articleshow/33330108.cms?utmsource=facebook&utmmedium=referral&utm_campaign=TOISports
It is only a game. What all this jealousy and hatred about? The team played better won easily. India has outplayed SA in almost every department of the game. India has groomed some of the best new generation of batsmen while we still go back to Afridi, Kamran and Malik. "Failure to plan is planning for failure". We always look at the past never plan the future.
@water bottle:
I prayed for pakistan to loose. My prayers got answered
@water bottle:
What a hateful, pathetic man you are, water bottle. No wonder we Pakistanis are such losers in the world in every respect.
@ water bottle you wish destruction for others, same thing boomerangs and comes back to bite you not them. That's karma. Start thinking positive. You say its currupt ,still think they are honest,dedicated to chase win and want it to loose in its efforts. Irony isn't it? Fix your mind and focus on your home team, not burn for other teams hardwork and success.
@ "I pray for india to lose" when you wish bad for others,nothing happens to them. Imstead it boomerangs and comes back to you. That's karma! Give love, get loved. Wish hate, prepare yourself for destruction.
@indian reader: It's already on Life Support...until someone (BCCI) just pulls the plug!!
@Taimur: Sour grapes.. mark my words, without the help of BCCI, Paksitan cricket will be dead within next 5 years! Now weep
Hahaha... To those who think match was fixed.....Please apply cold water to burned areas....LOOOOOL
Decoding the Pakistani response
When Pak Wins -- We are the champions
When India wins-----its fixed
applauses for their jealousy
@Honest Ha ha! Rofl! You know ho to make a point!
Who cares? We are winning that street football stuff or whatever.
So nice of Mahindera Singh Dhoni to let Virat take the winning shot. What a captain. You have to admire the man.
Congratulations team India. Had me sitting on the edge of my seat (at work) keeping one eye on my ipad. Looking forward to Sunday.
I think BJP and AAP may be does not want India to final because news channel on that be showing or talking about cricket rather than politics but I think it suits Congress because people will not talk about anti incompetence ................. writing just on a lighter note
Awesome performance, Indians are on fire.
Oxford dictionary has changed the word 'consistent' to 'kohli' and 'choker' to 'South Africa'
Now as usual Pakistanis will tell its a fixed match...
India prove they are the Biggest of Big three.. sorry Big twenty
Same face expressions shown by Virat Kohli today as well as he shown during asia cup match against Pakistan
Pakistani young batsmen should make indian batsmen like kohli their hero. then only they will succeed.
VIRAT KOHLI........ any doubt who the worlds best batsman is......
One win away from another world cup. 4 world cup victory after aus. Pakistanis will be so upset today.
Well done and true champion stuff
Would SA have dared to win? They are paid to throw match away, not to win.
We are proud of you guys....................:)
What's the big deal - india will win final also - it's all been fixed beforehand