State of art systems in the domain of dynamism detection fail to estimate noise if depth images are being collected as input for the dynamism detection, as the noise in depth images depend on the scene being captured. Disclosed herein are method and system for determining dynamism by processing depth image of a scene. The system models depth sensor noise as ergodic stochastic process by determining that distribution estimated at each reference pixel from a plurality of neighborhood pixels in a reference image being processed is statistically same as a distribution estimated from evolution of the reference pixel over the time. After modeling the depth sensor noise in this manner, the same is eliminated/removed from the reference image, which is then processed to estimate divergence at each pixel based on temporal and spatial distribution built at pixel level in the reference image, and in turn determines dynamism in the scene.