This paper deals with designing and analyzing the performance of indoor Free Space Optics (FSO) link for various modulation techniques in diffused channel conditions. At the present time, FSO is widely adopted because of its features; high speed, security, low power consumption and unlicensed spectrum. LEDs and LASERs are optimum choice to cater the dynamic range of requirements for optical communication system. The indoor FSO system has been simulated in Optisystem 14 software using various modulation schemes under different attenuation factors which may influence the performance of the system. In this paper, we have analyzed the performance of different modulation schemes such as Return to Zero, Non-Return to Zero, Phase Shift Keying, Pulse Amplitude Modulation, Quadrature Amplitude Modulation and Minimum Shift Keying. This work mainly focuses on the parameters; Bit Error Rate, Q-factor and power corresponding to transmission distance achieve minimum attenuation.