I have recently updated the MIUI 7 to MIUI 8. Thought it was based on Android Marshmallow. But it is on the same Lollipop version. How do I update it into Marshmallow? I know there is no official way to upgrade. So looking for other ways.
As of now MIUI 8 is still Lollipop (and will likely stay that way due to Xiaomi pushing Redmi 4 series), and there's no Marshmallow-based port either, so you will have to make a choice between up-to-date Android version and MIUI UI/features.
If you do decide that living on the cutting edge is worth the sacrifice, start unlocking and flashing custom ROMs. XDA-Developers will give you a good start, hosting a number of popular ROMs such as LineageOS (this would even bump you to Nougat).