Why does my phone show less storage than it's supposed to? I have a Lava Iris X1 (8GB ROM), but the storage shows up in two types.

Internal storage total space is 3.54GB:

Available                         : 2.52GB
Apps (app data &amp; media etc.)      : 0.97GB
Cached data                       : 48.17MB


Phone storage total space is 2.50GB:

Available                         : 8.55MB
Apps (app data &amp; media etc.)      : 27.54MB
Pictures, videos                  : 1.85GB
audio (music, ringtones etc.)     : 313MB
Downloads                         : 25.92MB
Cached data                       : 64.14MB
Misc.                             : 223MB


I am confused about why my phone memory is less than 8 GB. Is my phone's total ROM capacity 8GB or not?
The flash chip inside your phone is 8gb, but not all of that space will be available to the user - some of it will be used by the other partitions, such as /system/ where the Android OS is installed, and the /cache/ partition which is used for temporary storage, among other things.

You can install this app to see how your storage is partitioned:
https://play.google.com/store/apps/details?id=com.cls.partition

For example, my Xperia SP also has 8gb storage

According to that app:


/lta-label - 16mb 
/system - 1211mb 
/cache - 542mb 
/data - 5500mb


The /data partition is the one you'll see as internal storage. 

Note that this doesn't actually add up to 8gb (more like 7gb) - the other point to remember is that device manufacturers always lie about capacities - e.g. my 16gb microSD card is actually 14.8gb. (It'll usually be a gig or so below what's reported, possibly much more for bigger devices.)