REASONS WHY BITCOINS CAN BE DECLARED ILLEGAL IN INDIA

The Sore in the value of Bitcoins have astonished the world and India is also witnessing such ssituation. The sudded rise in the Bitcoin transactions in the country has caught the attention of the Indian Government which is planning toh regulate Bitcoins in the country and is currently working on declaring the legal status of Bitcoins in India.
According to the data provided by the Indian Government, average Rupess 2000 crores(around 310million$) worth of Bitcoins are traded(bought/sold) in India.Considering this high volume the government is planning to impose strict rules on Bitcoin trading.
Here are some areas which is worrying the Indian Government and can be the reasons to declare Bitcoins ILLEGAL in India.

1)Use of Bitcoins in the parallel economy:
As per the government sources Bitcoins are used in large amount to trade in parallel economy for many things like drugs,wepons,etc.which is a very dangerous as it gives rise to terrorism and other illegal activities.

2)Tax evasion: In India you have to pay tax for any income earned. INDIAN Bitcoin wallets are regulat and connected to the INCOME TAX payers ID no. so on large Bitcoin receipt and its sales and conversion to INDIAN RUPEE, tax is deducted at source while transferring to bank account. However if the Bitcoins are stored in foreign wallets the transactions are unknown to the Indian Government and thus tax can be evaded. The government is also finding ways how Bitcoins can be used for money laundering in India so that itI can control it.

However, currently there is no law in India which declares Bitcoins ILLEGAL but the Government has already said that it does no support Bitcoins and people buying and using the are responsible for its own.

What is your views on this? Is Bitcoins legal or illegal?