I don't think there will be jail term for holding or mining, but trading they can impose, because holding or mining there is no way govt can find we are doing this.
For trading if you have enough crypto, you can go outside India and sell there and back to India and pay taxes on crypto earning.
If you have the capacity to go abroad and sell your crypto currency then why you want to pay your taxes back home for the earnings as it is not even permitted to earn a profit let alone hold your coins. Bitcoin gives us the protection to mask our identity if you are not dealing with any exchanges inside your country who comply with all the KYC and AML procedures and hence there is nothing to worry about someone identifying you with just your wallet address.