Schemas can be included inside of XML file is called Inline Schemas.This is useful when it is inconvenient to physically seprate the schema and the XML document.A schema is an XML document that defines the structure, constraints, data types, and relationships of the elements that constitute the data contained inside the XML document or in another XML document.Schema can be an external file which uses the XSD or XDR extension called external schema. Inline schema can take place even when validation is turned off.