It is a term that applies to college athletes. A student-athlete by default gets to play at the college level for four years. There are only two exceptions to this rule. The first is for medical reasons. For example, a student who gets injured on the first play of the first game in football. It knocks him out for the year. The injured athlete can apply to the NCAA for an extension beyond his four years. This is usually for one year. This called medical red shirting.
The second exception is when, for whatever reason, a coach decides that he won't need you to play during your first year at college. The coach can red-shirt you and extend your eligibility for one year. You can practice but are not allowed to do anything but set the bench during games.
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The meaning of red shirt in College Basketball is the same as other sports. The term is applied to a player who chooses to sit out for a season, usually after suffering a severe injury.