In case of intracellular digestion, digestion takes place inside the cell. Digestive enzymes are secreted in the food vacuole where food is digested. Absorption and assimilation are also intracellular in this case. Food is simple in this case.
In case of extracellular digestion, digestion takes place outside the cell. A rudimentary or developed alimentary canal may be present for facilitating extracellular digestion. Extracellular digestion is more evolved than intracellular digestion. Complex food can be utilised in this case.