**Indian Society in Ancient Times:**

In ancient India, the society was divided into four major varnas or social classes based on occupation and social status. This social division was known as the Varna system and was primarily defined by birth. The four varnas were:

1. **Brahmins**: The Brahmins were the priestly class responsible for performing religious rituals and studying and teaching the scriptures.
2. **Kshatriyas**: The Kshatriyas were the warrior and ruling class who were responsible for protecting the society and maintaining law and order.
3. **Vaishyas**: The Vaishyas were the merchant and agriculturist class involved in trade, business, and farming.
4. **Shudras**: The Shudras were the laboring class who served the other three varnas and performed menial tasks.

**Caste-Based Discrimination:**

The varna system gradually evolved into a more complex caste-based hierarchy with the addition of numerous sub-castes or jatis based on occupation, birth, and regional divisions. This system of social stratification led to caste-based discrimination in several ways:

1. **Occupational Restrictions**: Each caste was assigned specific occupations, and individuals were expected to follow the occupation of their caste. This led to rigid occupational restrictions, limiting social and economic mobility for individuals belonging to lower castes.
2. **Social Exclusion**: Castes were ranked hierarchically, with the Brahmins at the top and the Shudras at the bottom. Individuals belonging to lower castes faced social exclusion, discrimination, and segregation from the rest of society. They were often denied access to temples, public places, and educational opportunities.
3. **Endogamy and Marriage**: Caste rules dictated that individuals should marry within their own caste. Inter-caste marriages were highly discouraged, and individuals who violated these rules faced severe social sanctions. This reinforced the caste system and perpetuated discrimination.
4. **Untouchability**: The lowest castes, known as the "untouchables" or Dalits, faced extreme social and economic marginalization. They were considered impure and were assigned menial tasks such as manual scavenging and handling dead bodies. Dalits were subjected to severe discrimination, violence, and social ostracism.
5. **Inequality and Privilege**: The higher castes enjoyed privileges and power, while the lower castes faced oppression and exploitation. This created a system of inequality, where individuals' opportunities and social status were largely determined by their caste of birth.

In conclusion, the ancient Indian society was divided into four varnas, which later transformed into a complex caste-based hierarchy. This system of social stratification led to caste-based discrimination through occupational restrictions, social exclusion, endogamy, untouchability, and perpetuation of inequality and privilege. These discriminatory practices have deeply impacted Indian society, and efforts are being made to address and eradicate caste-based discrimination in modern times.