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In Indian Philosophy the ny?ya and vai?e?ika school are known as allied, but there is a difference between the two schools regarding the number of categories. Although, Maharshi Gautama, the founder of Ny?ya Philosophy and Maharshi Ka?ada, the founder of Vai?e?ika Philosophy, did not specify any number of categories in their s?tragranthas, Maharshi Gautam mentions sixteen categories in his Ny?yas?tra and Maharshi Ka?ada mentions six categories in his Vai?e?ikas?tra to gain nih?reyasa. However, later on almost all navya-vai?e?ika ach?ryas accepted abh?va as a separate category, it must be told that seven categories are generally recognized in vai?e?ika philosophy. Although there is such a difference of opinion between the ny?ya and vai?e?ika school regarding the number of categories, the difference cannot be overemphasized. Because, just as all the things of the world are known by the sixteen categories recognized by the ny?ya, in the same way all those things are known by the seven categories recognized by the vai?e?ika. That is to say the sixteen categories of ny?ya can be included in the seven categories of vai?e?ika. In this article, after discussing the nature and number of categories following ny?ya and vai?e?ika school, I have discussed how the sixteen categories of ny?ya are included in the seven categories of vai?e?ika and finally seven categories are recognized.