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While I have interest in IBC, Taxation and Tech law/TMT, I have heard from many people, including threads on this platform say that IBC as a field is oversaturated and no firm is hiring for IBC teams, similarly taxation is considered not a very lucrative career option, I never understood why, and not many opportunities are available in TMT considering I want to work in Delhi. In the end everyone ends up recommending to do M&A, gen corp etc. which I have no interest in.
1. The CA angle- CAs are skilled professionals, especially in tax but a tax lawyer is not just a tax professional. There are many ancillary documents and agreements you need to know how to draft in order to do effective tax planning and this skill is lacking in CAs. Moreover when it comes to litigation, CAs tend to focus on each and every small detail that might help them so that they somehow get the relief from courts from their clients but in the process they focus less on drafting with precision and poise and rather focus on points in favour. Furthermore, the CAs are also lacking the evidence angle in search cases which makes them unsuitable in certain situations. But nevertheless as they dominate the profession and practice , they are in a position where the sheer quantity of CAs and their practice methods becomes the norm and hence heavy drafting without precision and unconnected points being on record is the norm. There is so much clutter in the tax litigation which makes it look daunting while in reality it isn't. (A lawyer can become a CA as well but a CA cannot become a lawyer unless he completely submits himself to the jealous mistress.) So to partly answer your question, YES, tax is not a lucrative career option for those who are not practicing it the way it is meant to be practiced.
2. Location- Mumbai is the best place to practice tax because of the number of cases and opportunities in advisory work but again 80% of this work is with CA firms. Second best options are Delhi, Bangalore, Chennai and Hyderabad. For learning the craft you need to join a good senior (not necessarily a designated sr adv), whether he/she is a lawyer or CA , it doesn't matter. Tax survives on logic all alone and in order to present the logic there must be clarity of thought and precision. But clutter is sometimes necessary to shroud the logic for pass through purposes. You will find good seniors in Mumbai, Delhi, Chennai and Bangalore but be advised you cannot judge them from afar. You'll have to work with everyone for atleast 2 months each to adjudge whether they can teach you anything or just force you to mug up the sections from ITA or CGST. So interning is the key, but the actual learning will only start when you join a senior for full time atleast for 2 to 3 years. But in your case as you have mentioned you are keen to reside in Delhi so you can look for seniors specifically in Delhi
3. Knowledge building- Tax is an specialised field. Start reading from the day you decide to enter taxation and never stop ever. Apart from this re brush yourself with the fundamentals of economics, accounts, and commerce. Focus on accounting for 2 to 3 weeks before reading a book on tax. This will help you to understand the terms and not get bored while reading the provisions. Start with CA books so that you understand the application of provisions and then move to commentaries to deepen your knowledge on the intricacies of the provision.
4. Direct or Indirect- completely your choice, there is no bar that you cannot do both but it would be a difficult task to manage both in future. Another point is do not stick to a particular forum, that is to say don't just decide to practice only at HC or only SC. Tax practice starts from the day a transaction has to take place to the day it is approved by the gavel. Find a senior that practices from advisory level and also litigates (but if he litigates only till the tribunal level that is also ok, as most disputes are settled at the tribunal level).
4. Forum- I think this point needs more consideration. The writ practice is taking precedence in tax. As soon as the assessing officer or department messes up the assessees approach the HCs in writ and do not fight the case on merits to save themselves from a potential addition. If you join a senior solely practicing at HC or SC then 90% of the time you will be bound in drafting only and there is no scope for actual learning and most of the cases are referred by CAs or other advocates. Whereas, a complete professional can shape you from advisory to litigation so the forum carefully.
5. Tax as a career option- Sufficiently lucrative if you possess or develop the skills required out of a tax professional and tax lawyer. Tax is always going to be there. Yes the number of CAs in the field makes it extremely competitive but remember clarity prevails over the clutter.
Take an informed decision. Do not go with what everyone is saying. Take your own decisions and take responsibility for your decisions. There is sufficient work in every field but you just have to be good enough so that the work comes to you otherwise nobody will pay as a professional to do average quality work.