Beyond Day Counts: The Binny Bansal Ruling and the New Reality for Globally Mobile HNIs 

The January 2026 ITAT ruling in the Binny Bansal case establishes that for high-net-worth individuals (HNIs) moving abroad, physical relocation and optimized day counts are insufficient to change tax residency; instead, Indian authorities will conduct a holistic, “substance-over-form” assessment of personal and economic ties. Despite Bansal’s move to Singapore for employment, the tribunal ruled he remained an Indian resident because his center of vital interests—including retained property ownership, major investments, and habitual presence—remained rooted in India, making his global income (including significant capital gains from share sales) taxable in India. This precedent signals that treaty protection and non-resident status will be granted only upon demonstrable and genuine translocation of life and economic interests, moving beyond calendar management to a more rigorous evaluation of an individual’s overall factual circumstances.

Beyond Day Counts: The Binny Bansal Ruling and the New Reality for Globally Mobile HNIs 

The recent ruling by the Bengaluru Income Tax Appellate Tribunal (ITAT) on Binny Bansal’s residency status is not just a high-profile tax case—it’s a watersheet moment for India’s globally mobile entrepreneurs and high-net-worth individuals (HNIs). The tribunal’s decision, delivered in January 2026, rejected Bansal’s claim of non-resident status for the financial year 2019-20, despite his relocation to Singapore for employment. 

This ruling crystallizes a profound shift in tax philosophy from a form-based, day-counting exercise to a rigorous, substance-over-form analysis. For any founder or HNI considering an international move, this case offers critical lessons that go far beyond tax law—it’s about the fundamental nature of how your life and economic interests are legally evaluated. 

The Crux of the Bansal Ruling: Why Days in India Weren’t Enough 

At first glance, the facts seemed to favor Binny Bansal’s argument. He had resigned from his executive role at Flipkart, relocated with his family to Singapore in FY 2018-19, and taken up employment there. In the contested year (FY 2019-20), he was physically present in India for 141 days. 

He argued this was below the 182-day threshold that should apply to an Indian citizen visiting the country from abroad. However, the ITAT’s reasoning dismantled this position on two decisive fronts. 

1. The Failed “182-Day Relaxation” Argument

The tribunal provided a crucial interpretation of the law. The relaxation that extends the 60-day threshold to 182 days for Indian citizens “being outside India” is not a universal pass. It is a benefit specifically designed for individuals who are already established as non-residents, allowing them to visit India to manage affairs without losing that status. 

The tribunal held that Bansal, having been a resident for years prior, could not use this provision to become a non-resident. His presence was deemed a “continuation of residence,” not a “visit from abroad”. Furthermore, the separate relaxation for those “leaving India for employment” applies only in the year of the initial departure (FY 2018-19 in his case), not in subsequent years when managing return trips. 

2. The Holistic “Tie-Breaker” Test: Where Substance Trumped Form

Since Bansal was found to be a resident under India’s domestic law (his 141-day stay, combined with over 1,200 days in the prior four years, satisfied the 60-day + 365-day test), the case turned to the India-Singapore Double Taxation Avoidance Agreement (DTAA). 

Even if he were a Singapore resident, the treaty’s “tie-breaker” rules would determine his sole residency for tax purposes. The tribunal’s application of these rules is the heart of the precedent. It evaluated his center of vital interests—a combination of personal and economic relations—over the entire year, not just his situation after moving. 

The following table contrasts the factors of form versus substance that the tribunal weighed: 

The tribunal concluded his center of vital interests and habitual abode remained in India, making him an Indian resident under the treaty. Consequently, the capital gains from his Flipkart share sale—reportedly involving an addition of about ₹1,081 crores to his income—were fully taxable in India. 

Immediate Implications for Founders and Globally Mobile Families 

This ruling signals a new era of scrutiny and has several concrete implications: 

• The End of “Check-the-Box” Relocation: Simply moving family, renting an apartment abroad, and getting a local employment contract is insufficient. Tax authorities will look backward and holistically at the continuity of your life. 

• Capital Gains at Risk: For entrepreneurs, the most significant financial exposure is on capital gains from equity sales. Treaty protection (like Article 13(5) of the India-Singapore DTAA) is only available if you are a bona fide non-resident. This ruling makes claiming that status exponentially harder in the years immediately following a move. 

• Increased Audit Scrutiny: The Indian tax department is now armed with a powerful precedent to challenge residency claims. As seen in other high-tax jurisdictions like California and New York, wealth migration triggers aggressive residency audits. Proactive, documented planning is no longer optional. 

Strategic Planning in a Post-Bansal Landscape 

For HNIs contemplating an international move, strategy must evolve from calendar management to life restructuring. 

• Initiate Planning Early: Residency planning must begin years before a liquidity event (like a share sale or exit). As noted in U.S. contexts, attempting to move domicile around a major transaction invites the highest level of scrutiny. 

• Document the Substance of Your Move: It’s about demonstrable action, not intent. Authorities will look for evidence that you’ve severed “vital interests” in India and established them anew: 

• Reduce Indian Ties: Consider disposing of or formally renting out secondary residential properties. Shift the management and location of significant investments. 

• Build Foreign Ties: Purchase a home, integrate family into schools and community, move cherished personal possessions, and establish long-term professional networks in the new country. 

• Understand the New Regulatory Horizon: Be aware that India’s tax laws are evolving to capture “stateless” income. From April 2026, proposed changes could deem an Indian citizen a resident if they have Indian-sourced income over ₹15 lakh and are not liable to tax in any other country, even with zero days spent in India. This global trend against stateless income makes choosing a jurisdiction with a substantive tax regime part of the planning process. 

• Maintain Meticulous Records: As with state residency audits in the U.S., detailed documentation is your best defense. Keep immutable records (flight logs, passport stamps, credit card statements) to prove physical presence, and document all steps taken to establish a new domicile. 

The Bottom Line: A Fundamental Shift 

The Binny Bansal ruling is a clarion call. It moves the goalposts from managing the number of days you spend in a country to proving the quality and substance of your life outside it. For the globally mobile HNI, tax residency is no longer a matter of travel itinerary optimization. It is a comprehensive, evidence-based demonstration of where your personal and economic life is genuinely centered. 

In an era where nations are fiercely protective of their tax base, this ruling affirms that for individuals with deep-rooted wealth in India, achieving non-resident status requires a fundamental and demonstrable translocation of life—a process that is measured in years of consistent action, not just days on a calendar.