Can any one suggest about doing Forex trading from online from India is legal and also which method of depositing and withdrawal is good to do with Forex trading company which is for a safety purpose and also to cut the taxes?What is the RBI standing for a Forex Trading by Individual in India at now?

Answer
RBI guidelines keep on changing. Every system has loopholes.

You need to evaluate many points:

1) What is the standing of the broker as per the rgulations- regulated or now?
2) Do they have any necessary approvals required for remittances?
and many more:

Suggest to check the RBI gidelines and look for the finer points there:

1) http://www.rbi.org.in/Scripts/FAQView.aspx?Id=66
2) http://www.rbi.org.in/scripts/FAQView.aspx?Id=53

These are covered in the following post:
http://www.forexabode.com/forum/viewtopic.php?f=5&t=52

Is forex banned only in India or also for Non residing Indians?

I know Forex trading is banned in India. But is it banned also for NRIs? (Non Residing Indians) I'm in India and I can't trade. But my friend in Australia can trade although he's an Indian by citizenship isn't it? So If I invest with him, he can trade and send me my profit share through Western Union Money Transfer right?

Answer
I have Indian friends in New Zealand opened accounts for friends in India.
Their friends then trade from India.
My Indian friends are not New Zealand citizens so I am sure it will work te same for you.