Its people like you because of whom my father was asking me the other day : " Is bitcoin illegal in India?" It isnt illegal and never can be. It only depends on the way you use it that can make it illegal. I have seen people using it for money laundry and at the same time I have seen people filling up taxes on bitcoin. Its just the way you use it.
If you have seen people using it to launder money then you should report it to the authorities and never aid those criminals because aiding them is supporting them. 
i am not a big time earner but i am paying my taxes and since the world is accepting bitcoin then there is no way India could oppose it,but you never know what stupid and surprising decision some people might take as some are willing to kill a human to save a cow.(those who follow the news will understand this)