Well, moving camera roll or Music folder didn't work for me, since the problem is related with system partition space. I had nearly 8GB free space, still no go. System files occupied nearly 5.09 GB (don't know why!) of space. So I found a different solution for it:
1. Firstly download Storage Cleaner app from store (I don't have enough post counts to insert link! It's published by Venz with 29570 reviews)
2. Go to time + date settings > turn off "set date and time automatically" > then change year to 2500 (you may get some app notifications, due to sudden time shift, ignore them)
3. Now open storage cleaner app > Click Begin > Let it occupy all the space (even 8GB in my case ) and only few Kb's left> Repeat this process twice or thrice, as you can see some space get automatically released (~200 MB). Then restart your phone. After this step, my System files decreased from 5.09 GB to 3.28 GB!
Repeat Step 3 again.
4. Now delete the Storage Cleaner app > change back the year > check for update > restart now.
This worked for me, Hope it works for others too