The lipo has a high discharge of 4A 30C. i read that arduino can only handle 2A does this mean it uses 2A out of 4A or is there some kind of system to limit the amp draw?
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You're good to go. You can use this.
Your battery is rated, not at 4A, but at 4Ah, meaning it has enough energy in it to provide 4A for 1 hour, or 1A for 4 hours, or 2A for 2 hours, etc. As long as your Arduino can handle the voltage (some models are 5V only) then you can use it.
Your Arduino is rated to draw 2A. Your battery, especially if it's a LiPO, is capable of providing much more than this. A good battery with these ratings you've given can be capable of delivering as much as 100A in short bursts.
Your battery has a capacity rating on it. Usually LiPO batteries can provide current for short periods at least ten times their capacity rating.

Daniel
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3Technically, he doesn't know what he's doing. But let's tell him that he's good to go. Why not. – Nick Alexeev Feb 17 '16 at 02:19
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No he doesn't know what he's doing. Not at all. But he can use this battery with his Arduino, provided that he hooks everything up right and doesn't do something stupid. – Daniel Feb 17 '16 at 02:21
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LOL thats true, i am much of coding student didn't really knew much about lipo's but now got things cleared, i am trying to learn electronics with help of arduino – Biological FSM Feb 19 '16 at 06:09
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Whatever you do, don't hook things up backwards. LiPOs can detonate rather violently. – Daniel Feb 19 '16 at 17:12