Is there an option in tar which deletes the .tar file as soon as it is successfully extracted.
Depends. If you enter tar --help or man tar, is there?
Well, I just skimmed the man page but there is no switch that deletes the tar file after extraction.
But shell scripting would do the job fine, you just have to type a bit more (or create new alias/shell script)
of course it can be done by scripting. However my file system has low disk space and i cannot have both the .tar and the extracted file at the same time.
well why not something like this
say you have a file test.tar.gz and you want to extract content and rm. why not something like
gunzip -c test.tar.gz | tar -xvf -; rm test.tar.gz
would this work for you?
** edit to this post **
now that i think about it, its pretty much the same thing as what bsddaemon just posted :X
As a side note, that one liners can be shorter 
tar -xzf test.tar.gz && rm test.tar.gz
I dont have Solaris with me now, but I believe for bzip2, the switch needed is j