I have created a permission group with limited access and no delete for the group. Users added in the group are getting their access denied to the list. The list has the same permissions as the site. Does anyone know what could be the problem here?
"Limited Access" permission is not a permission in itself. It is simply a prerequisite for being granted any other permission on content within the site. For example, if you take a person that currently has no defined access on the site at all, and grant them Read or Contribute permission to an individual list item, they will automatically also receive Limited Access permission to the list and the site. If you remove that Limited Access permission from either the site or the list, they will also lose the specific permission you granted them on the item.