Limit:- There are two extreme possible sizes of a component. The largest permissible size for a component is called upper limit and smallest size is called lower limit

Tolerance:- The permissible variation in size or dimension is tolerance. Thus, the word tolerance indicates that a worker is not expected to produce the part of the exact size, but definite a small size error is permitted. The difference between the upper limit (high limit) and the lower limit of a dimension represents the margin for variation to workmanship, and is called a tolerance zone.

Tolerance can also be defined as the amount by which the job is allowed to go away from accuracy and perfectness without causing any functional trouble, when assembled with its mating part and put into actual service.