Tax Strategy, Decision-Making, and Leadership in Law: Insights from Ms. Bijal Ajinkya

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Tax planning and estate structuring are often viewed as purely technical areas of law. However, my interview with Ms Bijal Ajinkya, a Partner at Khaitan & Co. , specializing in Direct Tax, Estate Planning, Trusts, Private Clients, and Investment Funds, showed that human behavior and economic incentives influence many of the decisions clients make. In this field, understanding psychology can be just as important as understanding the law.

One of the key ideas she explained was the role of behavioral biases in tax planning. Some multinational companies tend to take a more aggressive approach to tax strategies, while others prefer to remain extremely conservative and operate strictly within the safest interpretation of the law. These differences often come down to organizational behavior and risk appetite.

Economic incentives also strongly influence tax planning decisions. Many countries offer tax benefits to attract multinational companies. Singapore is a well-known example: if a company places its global headquarters there, certain income may be taxed at around five percent. In return, the country gains economic activity, employment, and highly skilled professionals. These kinds of incentives shape where companies choose to locate their operations.

However, international tax rules have become stricter in recent years. Under the OECD’s BEPS Pillar Two framework, companies cannot simply create shell entities in low-tax countries to access incentives. Governments now require economic substance, meaning there must be a real commercial reason and actual business activity in that location before tax benefits can be granted.

Another important factor affecting investor behavior is certainty in tax law. Investors are generally willing to pay taxes, but they want clear and predictable rules. A well-known example in India is the Vodafone tax dispute. Although the Supreme Court ruled in Vodafone’s favor, the government later changed the law retroactively, effectively overturning the judgment. This created uncertainty and led many foreign investors to question whether India was a stable investment destination.

When advising multinational clients, risk mitigation becomes an important part of the process. Lawyers evaluate whether a company can establish genuine economic substance in a country, whether the country has bilateral investment treaties that provide legal protection, and whether its tax system offers consistent and predictable rules. These factors help determine whether a jurisdiction is suitable for long-term investment.

Our discussion also covered estate planning, which is another area where behavior and psychology influence decisions. One common misconception is that estate planning is only necessary for families with internal conflict or distrust. In reality, estate planning is mainly about succession planning, asset protection, and managing cross-border tax risks.

Many families delay estate planning due to procrastination bias. They assume everything is functioning smoothly and postpone making formal arrangements. Problems often arise later, when families realize that clear structures should have been established earlier. Estate planning also becomes more complex as families become increasingly global, with members living or holding citizenship in multiple countries, which creates additional tax and legal considerations.

Family culture and hierarchy also influence estate planning decisions in India. Questions such as whether daughters should inherit family wealth may still be shaped by community expectations and traditional views. At the same time, many families are becoming more practical and considering which family member is best suited to manage the business, regardless of gender.

The conversation also touched on investment funds and regulatory strategy. Compliance costs can influence where funds choose to establish themselves because these costs ultimately affect returns. Fund managers therefore consider not only tax rates but also regulatory efficiency, simplicity of compliance, and the ability to communicate with regulators when clarification is needed.

Global tax developments also play an important role in shaping investment decisions. India is an active participant in international tax discussions and is a special invitee to the OECD. In some cases, India has even introduced domestic tax laws before international agreements were finalized, showing how closely global policy developments and national regulations are connected.

Innovation in legal services is another emerging topic. While technology and AI tools are becoming more common, legal work in areas such as tax planning and private client advisory still requires highly customized solutions. Each client’s situation involves unique legal, financial, and emotional factors, which means standardized automated answers are often insufficient.

Ethics also play a critical role in tax advisory work. When advising clients on wealth preservation, the goal is not to pursue the most aggressive tax structures possible. Instead, the focus is on building stable, compliant strategies that protect and grow wealth over the long term.

The interview also explored women in leadership within the legal profession. When Ms. Bijal began her career around twenty-five years ago, far fewer women were present in mainstream professional fields. Over time, the profession has evolved significantly, although some cultural biases still exist.

In some early client meetings, she noticed that certain business leaders initially questioned whether a woman could provide strategic advice. However, once professional credibility was demonstrated, those assumptions disappeared. Interestingly, she mentioned that many clients eventually prefer women advisors for succession planning because they are often seen as more discreet and careful when dealing with sensitive family matters.

Balancing a demanding legal career with family responsibilities is another challenge many professionals face. She emphasized the importance of having a strong support system at home as well as reliable help for household responsibilities. According to her, maintaining stability at home allows professionals to focus more effectively on their work.

For young women considering careers in law or finance, she advised choosing a specialization that fits both professional interests and long-term lifestyle goals. Some areas of law require extremely unpredictable hours, which may make work-life balance more difficult. Understanding these realities early can help people make better career decisions.

Finally, she offered advice for students interested in law, economics, or policy. A strong academic foundation is important, but success in a career is not determined only by grades. Qualities such as hard work, discipline, honesty, and curiosity play an equally important role. She also noted that both successes and failures shape professional growth. Winning cases builds confidence, while setbacks often provide valuable lessons that help people improve.

Overall, this conversation showed that fields like tax law and estate planning involve much more than legal rules. Economic incentives, behavioral biases, family dynamics, and global policy changes all influence how decisions are made. Understanding these broader factors is essential for professionals advising clients in complex financial and legal matters.