Information about NDVI http://en.m.wikipedia.org/wiki/Normalized_Difference_Vegetation_Index

To calculate the NDVI of an area you will use the formula (Near Infrared - Red) / (Near Infrared + Red). In case of Landsat 8, the near infrared band is band 5 and the red band is band 2. 

Hello Venkata once again,

If bio-physical measurements extracted from one image (e.g., biomass) are to be compared with the same biophysical information extracted from other images obtained on different dates, then it is usually essential that the remote sensor data be atmospherically corrected. Normalized Difference Vegetation Index (NDVI) derived from LANDSAT data is used routinely to measure vegetation biomass and functional health in many decision-support systems such as Famine Early Warning System and Livestock Early Warning System (Jensen et al., 2002). Erroneous NDVI estimates can result in the loss of livestock and human life. Contributions from the atmosphere to NDVI are significant and can amount to 50 percent or more over thin or broken vegetation cover. Therefore it is necessary to remove the deleterious effects of the atmosphere in remotely sensed data that are used to compute NDVI estimates.

If you want to do a simple visual analysis of NDVI then you can use the "Image Analysis" toolbar, "Raster Calculator" etc.  in ArcGIS. Otherwise if you are doing some serious change detection studies then it is better to go from DN->Radiance->TOA Reflectance->Atmospheric Correction steps. I usually follow these steps and calculate the NDVI in "model maker" of ERDAS Imagine.

You can follow my question page on RG and also watch these youtube tutorials. The steps are quite simple.

References: Introductory Digital Image Processing - A Remote Sensing Perspective (John R. Jensen)

https://www.researchgate.net/post/Is_it_incorrect_to_calculate_NDVI_using_DN_Digital_Numbers_values_associated_with_a_satellite_image_instead_of_using_the_Surface_Reflectance_values

https://www.youtube.com/watch?v=3KhUaIwrT9Q

https://www.youtube.com/watch?v=F3rsSq0-mmE

https://www.youtube.com/watch?v=GwwXhMKo-yM

These websites may be also helpful ... 

1. http://earthobservatory.nasa.gov/Features/MeasuringVegetation/measuring_vegetation_2.php

2; http://spatial-analyst.net/ILWIS/htm/ilwis/how_to_calculate_ndvi.htm

3;http://www.youtube.com/watch?v=F3rsSq0-mmE

4;http://ibis.colostate.edu/webcontent/ws/coloradoview/tutorialsdownloads/co_rs_tutorial10.pdf

Thank you all for comments.

While performing the FLLAASH atmospheric corrections which atmospheric model should I use?

Thanks nguyen

Hi,

you have to calculate NDVI by using (NIR-RED)/(NIR+RED). your data having NIR and RED band is required. IN LANDSAT8, NIR and is Band5 and red is BAND4. your data having the range 0 to 1, it is reflectance data and DN values depending upon the your Radiometric resolution if it is 8-bit the value range is 0 to 2power8.we can apply on the both the data because in this formula units is not a matter

@deepika... IN LANDSAT8, NIR and is Band5 and red is BAND4. but @milton... In case of Landsat 8, the near infrared band is band 5 and the red band is band 2. I am just wondering red is for band 2 or 4 :)