Can anybody remitting money to India use bitcoins? If bitcoins are sent from abroad and then sold in Indian exchanges, are we violating any FEMA guidelines. Plus remittances are tax free. Is this the case with bitcoins sent from abroad and then sold on Indian exchanges as well?
You're NOT violating FEMA or any other law by encashing BTCs at Indian Exchanges yet. The same applies for mining bitcoins in India. As of now ordinary income tax applies for both cases.