Flipkart Co-founder Binny Bansal Loses Tax Battle on Share Sales
Overview
The Income Tax Appellate Tribunal (ITAT) has dismissed Binny Bansal's claim of non-resident status, denying him tax benefits under the India-Singapore Double Taxation Avoidance Agreement. The ruling pertains to capital gains from selling Flipkart shares in FY 2019-20. A pending refund of over ₹5.8 crore now requires verification.
ITAT Rejects Binny Bansal's Non-Resident Tax Claim
Binny Bansal, a co-founder of e-commerce giant Flipkart, has been denied tax relief by the Income Tax Appellate Tribunal (ITAT) in Bengaluru. The tribunal rejected his assertion of non-resident status, which he used to claim benefits under the India-Singapore Double Taxation Avoidance Agreement (DTAA).
Dispute Over Share Sales
Bansal had argued that his residency in Singapore for employment qualified him as a person visiting India, thus classifying him as a non-resident. This was crucial for him to avoid capital gains tax in India on income earned from selling shares of Flipkart Private Limited Company, incorporated in Singapore, and other Indian listed companies during the financial year 2019-20. He sold approximately 600,000 shares in transactions involving investors like Tiger Global.
Tribunal's Ruling
The ITAT, in an order dated January 9, found that Bansal had stayed in India for more than 60 days during the relevant period, satisfying the residential test under Section 6(1)(c) of the Income Tax Act. Consequently, the tribunal held that he was not entitled to the claimed exemptions. Bansal, who later ended his association with Flipkart in 2023 to start an AI e-commerce venture, can appeal this decision.
Pending Refund Verified
The tribunal's decision also directed the assessing officer to verify a pending refund amounting to over ₹5.8 crore and reissue it if it had not already been credited to Bansal.
