It's funny how news are sold on internet. These online media manipulate the content and add spices and flavors from their end. This is the picture of draft that was circulated over internet and the reason of this news:



You can clearly read that the punishment is based on the condition. The drafters have used the words 'any of the activities mentioned in clause (e), (g) and/or (h) of sub-section (1) of Section 8'. Hence, drafters are proposing only selective ban, not conclusive one. Trading or holding cryptocurrencies will be considered as offence only if used for activities mentioned under those clauses. Moreover, this is just a proposed draft, final bill comes to effect after passing from Houses of Parliament which is subject to several changes in the draft. So it is too early to fear anything.

But I doubt it will pass according to Pomp on Twitter, because they need to consult with the Rural Bank of India first. A higher chance that passing this law will be unlikely.