AR stands for Augmented reality while VR stands for Virtual reality. Augmented reality as the name suggests is an interactive experience with real-life situations where the object from the real world is enhanced by computer-generated perceptual information through the various sensory modalities like visual, auditory, or olfactory. This is something that fulfills 3 basic features:-
a)combo of real and virtual worlds
b)perfect 3-D registration of the objects
c) complete and successful interaction
The information can be constructive or destructive as being additive to the natural environment or masking the natural environment. The information is so intermingled with the actual world that it's an aspect of the real world.
Virtual reality on the other hand is the same or a little bit different from the real world. Anyone who's using virtual reality is taken into a different world altogether where he's equipped with headgear and then the things inside the gear are moving and then you too are moving along. These are basically used in the entertainment industry and video games and educational purposes like medical or military training.
The main difference between the two is that in virtual reality the idea of a person's surroundings is completely basked with the virtual technology whilst in augmented reality the information is just maximized along with the existing environment that we already know about.