Let me try and answer some of your questions.
Before a non Indian can crew an a/c within India, they will need to be security checked. This can take anything up to 3 months, some never get it.
In the meantime the DGCA will interview the candidate. If successful a 3 month validation will be issued, provided you are security cleared. Within the 3 months a law examination will have to be sat and passed. The CAR's are on the DGCA website. Oh, almost forgot, a work permit is needed. This is issued at the Indian embassy of residence. Among the documents the issuing officer needs to see is a copy of the employment contract. He/she will send this copy to the tax authorities in India. Check into a hotel in India as crew, the first thing they do is photocopy your passport and your work visa. The beuacracy is something to behold.
The authorities have clamped down in the recent past, so I cant see anyone avoiding Tax in India unless the employer pays it. Like all tax, the employee will be held responsible for tax not paid. Not trying to scare monger just trying to give a heads up, to the uninitiated, as I don't want to see follow aviators "get hurt".