Pulsed Thermography is an advanced NDE technique which is becoming popular due to fast inspection rate, non contact nature and it gives full field image. Pulsed Thermography is successfully applied for defect detection, defect depth estimation, coating thickness evaluation and delamination detection in coatings but it is limited for evaluation of subsurface defects (of the order of few mm). In this paper we discuss the application of Pulsed Thermography for defect quantification and effect of defect size on it in AISI 316 grade SS which are important structural materials used in nuclear and other industries. Log First Derivative method is considered for defect depth quantification and the results are compared with Finite Difference Modeling carried out using ThermoCalc 6L software.