No, वहाँ is specifically when referring to a position. In the case of "What is there in your hands" the word 'there' is not referring to a position. It's the same usage as "There are many cows". You wouldn't say वहाँ कई गायें हैं, which would translate as "There are many cows there". So in this sentence "is there" = "है".
PS. If there was a comma, then you would be correct. "What is there, in your hands" would make 'there' positional.
I also asked this before and based from what I've learned, the है in the sentence does not refer to the hands or yourself but the thing that is in your hands. It means the sentence assumes that there is only a single object in the hands.
"तुमहरे हाथों में क्या है" in literal sense is "In your hands, what is (the thing)?" but what it really means is "What is there/(the thing) in your hands?"
I hope this helps :D