In english language when do you use 'that' and when do you use 'which'. Your help will be appreciated.

Which is generally used for information that could be taken out and still have the sentence make sense. It marks unnecessary, add-on information. "Which", in a sentence, is always preceded by a comma and, when it's statement is over, ends with a comma.

That, on the other hand, is used for information that is important to what you're saying and taking it out would leave the sentence feeling empty. There is no comma used with that.

Examples:
The teddy bear that was built by my daughter was everyone's favorite present.
The teddy bear, which was built by my daughter, was everyone's favorite present.

In the latter example, you can remove the information in the comma because the main focus isn't on my daughter's teddy bear, but just the teddy bear itself. "The teddy bear was everyone's favorite present" still makes sense without the information that "which" includes.
However, for the former example, nothing can be taken away because the teddy bear having been built by my daughter is *important*, possibly because there were other teddy bears at the party.

That and which can be used interchangeably in most circumstances, That can even be used as an alternative to who. Let's take a closer look.
who / which / that
Who, which and that are all relative pronouns and are used to introduce relative clauses. They can be used as the subjects of verbs in relative clauses. As relative pronouns, who can only refer to people and which can only refer to things. But that can refer to both people and things. That when it refers to people denotes an informal style of English. Compare the following:
Who is the woman wearing dark glasses who arrived five minutes ago?
'The Office' is a TV sit-com which / that is not suitable for young children.
Do you know anyone that could help me design web pages? - I know a German web artist who designed web pages for Lufthansa.
Note that who, which and that replace he, she, it and they and enable us to join two clauses which would otherwise be separate.
Who is the woman wearing dark glasses? She arrived five minutes ago.
'The Office' is a British TV sit-com. It is not suitable for young children.
I know a German web artist. He designed web pages for Lufthansa.
Who, which and that can also be used in a similar way as the objects of verbs in relative clauses in which case they replace him, her, it and them. We can use whom instead of who as an object relative pronoun in a more formal style of English. Compare the following:
She's now living with the musician that / who she met at the pop concert.
She's now living with the musician whom she met at the pop concert.
She's now living with the musician. She met him at the pop concert.
Where are the Radiohead CDs which / that your brother borrowed last week?
Where are the Radiohead CDs? Your brother borrowed them last week.
Note that when who, which and that function as object relative pronouns, they are often left out of the sentence altogether:.
She's now living with the musician she met at the pop concert.
Where are the Radiohead CDs your brother borrowed last week?
that rather than which
After quantifiers like everything, something, all and after the thing… we normally use that rather than which:
Everything that is in this room once belonged to Elton John.
The thing that amazes me is how wide his interests were.
All that will be left after the auction are a few candlestick holders.
which but not that
Where the relative pronoun refers to the whole of the previous clause, and not just to the noun that precedes it, that cannot be used. In these instances, we have to use which:
The explorer Sir Ranulph Fiennes ran in seven marathons in five different continents recently which is amazing for a man of 59 who had a heart attack six months ago.
Here which replaces this:
The explorer Sir Ranulph Fiennes ran in seven marathons in five different continents recently. This is amazing for a man of 59 who had a double heart bypass operation six months ago.
which but not that in non-identifying relative clauses
In non-identifying relative clauses, which usually serve to provide additional, non-essential information and are separated by commas, which is the relative pronoun that is normally used. That would be unusual.
Compare the following pairs of identifying and non-identifying relative clauses:
Have you got any pieces for the guitar that are easy to play?
I lent him The Rain in Spain and Japanese Folk Song, which are easy to play.
The last symphony (that) he composed was the ninth symphony.
The ninth symphony, which was composed in the final year of his life, was not performed until after this death

I tried to quote the ultimate authority on the English language, W.H. Fowler, but found that the excerpt was too long. Here is the link so that you can read it there. http://www.bartleby.com/116/205.html

Check out the link.

u can use "that" whenever u want, but use "which" only when there is choice.