India has a chronic problem of tax evasion, in the grand schemes of things only a handful of their citizens can claim a defense/offense of "it's ability to tax foreign income of resident Indians", since only a handful do not have the ability to evade taxes or have never deliberately evaded taxes.
A quick search for "tax evasion in India" can educate on this topic, including an article[0] that states "tax evasion is India's national sport."
My Indian friends tell me, that they don't feel bad evading taxes a little since the politicians, bureaucrats etc would squander it through bribes and scandals. To which I say, perhaps the main reason for rampant scams and bribery is that taxes are evaded and these public employees are paid poorly.
[0] http://www.businessweek.com/magazine/in-india-tax-evasion-is...
edit:
On re-reading my comment I realized that I was unclear why in it's current scope RBI's main concern is not the scope of tax evasion. Currently India looses over $300B to tax evasion each year, even if all of bitcoin's market cap was taxable by India this would be a very small fraction of their tax losses.
I believe the real reason lies in addressing customer grievances. India is plagued by numerous scandals and scams in the private sector and the only resort for most people is going to the consumer courts if they can afford it. Their already few options would be obliterated if they choose to deal with bitcoin.
While this may be a concern in the developed countries, its not nearly as bad as the situation in India and similar economies.
> To which I say, perhaps the main reason for rampant scams and bribery is that taxes are evaded and these public employees are paid poorly.
Not really. India is a poor country and public employees are paid well-above the median income. Even the lowest level of public employees - sweepers, janitors and the like make more than 2.5X the median income. [1] And bureaucrats who are worth bribing get well more than that. Corruption in India and most other developing countries is a prisoner's dilemma type of situation. Each individual benefits from being corrupt and there is significant improvement in quality of life if you earn $1200 a month instead of $900 month. So they choose to be corrupt and this is more or less a rational decision. It isn't an easy problem to solve, especially in the current world order with restrictive immigration practices.
[1] http://latestjobsingovt.com/freshers/peon-watchmensweeper-jo...
Real estate.
Some of India's real estate is priced as high as Manhattan, but the sale process is murkier. The reported sale figure (for tax purposes) is much lower than the actual sale figure. This is very interesting for people used to Zillow - why would someone agree to a transaction like this? How does the actual exchange take place without any backing paperwork?
In fact, there are people who claim that there is a physical bundle of a few billion dollars that keep changing hands as people sell and buy real estate - pretty much a closed system. There have been many attempts by startups to pull a Zillow in India, but most of them failed (including one I was associated with).
Now here's the interesting point about bitcoin - I mentioned above that the current real estate market is a closed system. The Indian govt has taken a series of rightfully justified steps to eliminate physical cash from the financial system - in India, you need to pay a charge to withdraw cash from a bank and also fill in extra paperwork. This ensures no new cash enters the real estate system.
Bitcoin could potentially upset the system.
What was the name of your startup. Housing.com is doing a pretty job imho.
My work history is in my profile.