I find that there are two violation of law , prima facie , if someone earns money by depositing in the online account and then not reporting it ( including in his total income for the year ) and not bringing in India.
Income Tax Act violation
1. It is simply comcealment liable for penalty & prosecution under I.T.Act.
2. You should know that anyone who is resident of India as per income Tax Act and having taxable income ( gross total income exceeding exemption limit) will have to fill up the column in his/her income tax return whether
- he has foreign bank account or
- He/she is signatory to any bank accounts
- He /She has assets aborad
Previously these column were not in the Income Tax Return. So , now anyone who is liable to file return of Income can be tried for false return if he has hiddne assets aborad.
2. FEMA violation
RBI permits remittance under Liberalized Remittance Scheme. However this scheme can not be used for certain purpose . It is important to examine whether RBI prohibits use of remittance for any entity or business you have described. You can read following FAQ on RBI site
Q. 30. What are the prohibited items under the Scheme?
Ans. The remittance facility under the Scheme is not available for
i) Remittance for any purpose specifically prohibited under Schedule-I
(like purchase of lottery tickets/sweep stakes, proscribed magazines,
etc.) or any item restricted under Schedule II of Foreign Exchange
Management (Current Account Transactions) Rules, 2000;
ii) Remittance from India for margins or margin calls to overseas
exchanges / overseas counter-party;
iii) Remittances for purchase of FCCBs issued by Indian companies in
the overseas secondary market;
iv) Remittance for trading in foreign exchange abroad;
v) Remittance by a resident individual for setting up a company
vi) Remittances directly or indirectly to Bhutan, Nepal, Mauritius and
vii) Remittances directly or indirectly to countries identified by the
Financial Action Task Force (FATF) as “non co-operative countries and
territories”, from time to time; and
viii) Remittances directly or indirectly to those individuals and
entities identified as posing significant risk of committing acts of
terrorism as advised separately by the Reserve Bank to the banks.
You will have to examine , if the remittance was NOT done for purpose not allowed by RBI under LRS . If you clear this , you can say there is no violation and your violation is restricted to I.T.Act only.