A method for identification of an activity performed by a subject, the method comprising: capturing movements of a subject in real-time using a sensing device, wherein the movements comprises 'n' skeleton frames of the subject, and wherein each of the 'n' skeleton frames represent data of 'N' skeleton joints of the subject; ascertaining, by a processor, at least one action associated with the subject from a predefined set of actions, wherein a plurality of actions from the predefined set of actions collectively form at least one activity, and wherein a gesture producing a motion of the subject's body part is treated as an elementary level movement of the subject, and wherein the elementary level movements when temporally grouped together form an intermediate level movement treated as an action, and wherein one or more actions and one or more gestures organized temporally form the activity, and wherein the ascertaining is based on captured movements of the subject and at least one predefined action rule, the at least one predefined action rule is based on context-free grammar CFG and is indicative of a sequence of actions for occurrence or non-occurrence of the at least one activity; and determining, dynamically, by the processor, a current activity performed by the subject, based on association between the at least one action and an immediately preceding activity with identification of sequence of actions, using a non-deterministic push-down automata NPDA state machine, wherein, the current activity is determined based on a state of a stack of the non-deterministic push-down automata, NPDA state machine, and comprises ascertaining whether the current activity is different from the immediately preceding activity, based on the state of the stack of the non-deterministic push-down automata NPDA state machine, wherein the stack is a data structure for storing and analyzing information of the identified action and the immediately preceding activity for identifying the current activity of the subject, and wherein the state of the stack is used to determine whether the current activity is same or different than the immediately preceding activity, wherein the state of the stack refers to whether the stack is populated or not, and wherein the current activity is determined based on an identification parameter associated with the immediately preceding activity and the at least one action, populated into the stack, wherein the NPDA state machine considers non-determinism while identifying the current activity, wherein the non-determinism is a condition in which the activity cannot be determined, wherein the current activity determining comprises determining whether the current activity being performed by the subject is a non-identifiable activity or not, based on the immediately preceding activity and the at least one action. capturing movements of a subject in real-time using a sensing device, wherein the movements comprises 'n' skeleton frames of the subject, and wherein each of the 'n' skeleton frames represent data of 'N' skeleton joints of the subject; ascertaining, by a processor, at least one action associated with the subject from a predefined set of actions, wherein a plurality of actions from the predefined set of actions collectively form at least one activity, and wherein a gesture producing a motion of the subject's body part is treated as an elementary level movement of the subject, and wherein the elementary level movements when temporally grouped together form an intermediate level movement treated as an action, and wherein one or more actions and one or more gestures organized temporally form the activity, and wherein the ascertaining is based on captured movements of the subject and at least one predefined action rule, the at least one predefined action rule is based on context-free grammar CFG and is indicative of a sequence of actions for occurrence or non-occurrence of the at least one activity; and determining, dynamically, by the processor, a current activity performed by the subject, based on association between the at least one action and an immediately preceding activity with identification of sequence of actions, using a non-deterministic push-down automata NPDA state machine, wherein, the current activity is determined based on a state of a stack of the non-deterministic push-down automata, NPDA state machine, and comprises ascertaining whether the current activity is different from the immediately preceding activity, based on the state of the stack of the non-deterministic push-down automata NPDA state machine, wherein the stack is a data structure for storing and analyzing information of the identified action and the immediately preceding activity for identifying the current activity of the subject, and wherein the state of the stack is used to determine whether the current activity is same or different than the immediately preceding activity, wherein the state of the stack refers to whether the stack is populated or not, and wherein the current activity is determined based on an identification parameter associated with the immediately preceding activity and the at least one action, populated into the stack, wherein the NPDA state machine considers non-determinism while identifying the current activity, wherein the non-determinism is a condition in which the activity cannot be determined, wherein the current activity determining comprises determining whether the current activity being performed by the subject is a non-identifiable activity or not, based on the immediately preceding activity and the at least one action.