My iphone is a 16GB but it only show that its a 6.76GB capacity

On your Mac/PC, check on iTunes what's taking the space. There's a bar on the bottom detailing it.

On your iPhone go to Settings > General > About and check how many songs, videos, photos and apps you have that might be taking all that space.

Are you certain it is a 16GB device and not an 8GB device? 6.76GB of total capacity would be about correct for an "8GB" device.

If it's 8GB then the 6.76 definitely sounds about right.

How Mac OS X and iOS report storage capacity

Tap Settings / General / About / Capacity