What will be the best move in this position? I am a lower rated (1200-1300) player, and I am quite hesitant while making sacrifices. In the current game I see that black's king is unprotected and a bishop sacrifice at f5 can open up an attack against the black king. Is this the best move in the current position?
Almost certainly Bxf5 is a winning move, but it may not be what you want to play. I asked if exf6 was legal. If it is, play it. After Black recaptures play Bg6+ and your attack is just as strong without sacrificing.

In the diagram position, Blacks position is dreadful, probably lost. If you can win without taking risks, why not? 

You are not sure if the sacrifice works. That is, you do not trust your analysis. Under those circumstances, should you sacrifice and risk losing? Generally speaking not, if you have a very good position and can see other ways to make progress. Generally yes if you think that your position is bad, and the sacrifice is a last shot.

But perhaps you should sacrifice anyway, just to find out how good your analysis is. Much depends then on the circumstances of the game, Friendly skittles? Last round of tournament? But if you find that it does not work, try to learn something. What did you not see? Why did you not see it? Is there something you should now remember to look for? Did you win, but only because your opponent defended badly? You should look at these things post mortem if you opponent is willing.