In SharePoint Online Site collection I have used 1 Custom list and i task list for my project items to be stored. Definitely in future those list items will exceeds more than 5000 items. What are the steps i need to take to avoid the List View Threshold Error in future. any suggestions and help would be appreciated. Thanks in Advance.
SharePoint list/library can store far more than 5K items. The problem is when your query (ie. view) is trying to query more than 5K items at once. To avoid it you should create indices on the columns that you use for filtering.
Have a look as well at this question as it provides some further options: How do I handle the large List with more than 5K items in SharePoint 2010?
create a template of your list/library and whenever you are close to reach 5000 you switch to the new library, you rename the old ones as you please