Phonetics is the study of all the speech sounds that the human voice is capable of creating. It deals with how speech sounds are actually made, transmitted and received.
In any language we can identify a small number of regularly used sounds (vowels and consonants) that we call phonemes; for example, the vowels in the words 'pin' and 'pen' are different phonemes, and so are the consonants at the beginning of the words 'pet' and 'bet'.
So, a phoneme is an abstract linguistic unit which serves to distinguish one word from another. Phonemes are realized in speech in the material form of their variants called allophones.
Allophones are phonetically similar sounds that do no contrast with each other. Allophones of a certain phoneme have articulatory and acoustic distinctions. Each allophone is used in a specific phonetic context: it occurs in a certain position or in a combination with certain sounds. Since allophones are realizations of the one and the same phoneme they can not distinguish words.
In Phonetics special symbols are used to represent speech sounds. Transcription is a visual system of notation of the sound structure of speech, a generalization of a great variety of sounds that are pronounced by speakers of a given language.