A lot of FUD is being spread by Indian media again. In fact Indias finance minister Arun Jaitley said:
"The Government does not consider cryptocurrencies as legal tender or coin and will take all measures to eliminate the use of these cryptoassets in financing illegitimate activities or as part of the payments system."
which basically means Crypto cant be used to buy and sell goods or services. But it should be okay trade. Its never mentioned as illegal of any sort.
So basically Bitcoin might be treated as a commodity/ asset for filing tax. As long as the taxes are paid, the Government is happy.