I would like to know if I can move only user database or default databases as well??

All databases can be moved

what sort of permission do I need to change for new directory path

irisusr should have RW access to the folder. The easiest way is to check what access (owner, group, permissions) is set for existing files/folders and then recreate the same in a new location.

and what all files I need to copy at new location??

IRIS.DAT and stream subfolder if it exist.

Please suggest if modification in iris.cpf file can do this all operation  

Absolutely.

1. Install InterSystems IRIS.

2. Shut it down.

3. Open <iris>/iris.cpf, there you will find:

[Databases]
USER=C:\InterSystems\IRIS\Mgr\user\

[Journal]
AlternateDirectory=C:\InterSystems\IRIS\Mgr\journal\
CurrentDirectory=C:\InterSystems\IRIS\Mgr\journal\

[config]
wijdir=C:\InterSystems\IRIS\Mgr\WIJ

4. Edit this file as you wish and move the corresponding directories.

5. Start InterSystems IRIS.