This letter proposes an optimal nondestructive subsurface defect detection method to investigate the capabilities of the infrared thermography through a finite-element analysis-based model. A finite-element analysis (FEA) software was used to generate models and analysis was carried out using MATLAB software. Pulse compression approach has been introduced for subsurface defect detection and its advantages and limitations are compared with existing phase approach-based thermography. Investigations has been carried out on a simulated plain carbon steel specimen with a flat bottom hole defects at various depths of different diameters is introduced. Comparison has been made with the conventional phase-based techniques.