Everytime I try to install anything from google playstore it says insufficient internal storage but actually it has internal storage. How can I solve this problem
Apps are stored on the /data partition, while the empty space you have is probably located on some other location, like internal SD card. Even if you have empty space elsewhere, apps couldn't be installed nowhere but on the /data partition.
There is a way to make /data partition bigger by resizing your partitions (I've done it myself), but it's not recommended if you don't know what you're doing, since you can end up making your phone unusable.