Performance and lifespan of batteries deteriorate with time due to various factors. Existing systems for battery management use different approaches for the battery management, and also rely on static value of parameters for State of Health (SOH) and Remaining Useful Life (RUL) estimation, thereby failing to consider current condition of the battery. The disclosure herein generally relates to battery management, and, more particularly, to a method and system for online battery management involving real-time estimation of State of Health (SOH) and Remaining Useful Life (RUL) of a battery, based on real-time data collected from the battery. The system determines state of the battery as one of charging, discharging, and rest. Further, corresponding to the determined state, the system determines values of one or more parameters, and processes the determined values with a battery performance model for online determination of the SOH and RUL.