Electric Vehicles (EV) and Hybrid EV (HEV) use Lithium (Li) ion battery packs to drive them. These battery packs possess high specific density and low discharge rates. However, some of the limitations of such Li ion batteries are sensitivity to high temperature and health degradation over long usage. The Battery Management System (BMS) protects the battery against overvoltage, overcurrent etc., and monitors the State of Charge (SOC) and the State of Health (SOH). SOH is a complex phenomenon dealing with the effects related to aging of the battery such as the increase in the internal resistance and decrease in the capacity due to unwanted side reactions. The battery life can be extended by estimating the SOH accurately. In this paper, an extensive review on the effects of aging of the battery on the electrodes, effects of Solid Electrolyte Interface (SEI) deposition layer on the battery and the various techniques used for estimation of SOH are presented. This would enable prospective researchers to address the estimation of SOH with greater accuracy and reliability.