Is it right that Price of Limit orders has to be inside the upper circuit and lower circuit limit values for any order being placed
Yes.
And is the band for trading formed by upper/lower circuit limits constant for the day or keeps changing
For stocks that don't trade in F&O, the circuit limits don't change during the day, however, for FO stocks, the circuits expand if one of them is hit.
And if the band is dynamic throughout the day, then what happens to a limit order that was placed inside the band, but the band moves to exclude it.
The band does not move to exclude an existing limit order. For example, let's say Stock X(trades in FO) closed at 100 and circuit limits are at 90 and 110. And you have a limit sell order at 110. If the stock moves to 90(lower circuit), the circuit limits are revised to 81(10% further down). However, the upper circuit remains at 110 and your limit order remains active.
