83(b) election for Indian founders: should you file, how to file Form 15620 with no SSN, and what India taxes and reports
An Indian founder taking restricted stock in a Delaware company should almost always file a Section 83(b) election by mail within 30 days of the share issue date, not the vesting date. A founder who stays and works in India has foreign-source compensation and no US tax at vesting, so the election costs nothing today and buys capital gain on the growth and insurance against a later move. No SSN is needed: the regulation asks for a taxpayer identification number, Form 15620 is optional, and the working route is a signed form mailed to the IRS office that receives Form 1040-NR in Austin, Texas, with an ITIN application in parallel. Miss the 30 days and there is no late election. The US guides we surveyed stop at the Austin mailbox; the first Indian leg is that founder stock in an unlisted US company is overseas direct investment, so the RBI unique identification number comes before the shares issue even when no dollar moves. The second is whether that stock is a perquisite under section 17(1)(d) of the Income-tax Act 2025, a live question for a founder paid by the Indian subsidiary and valued on a different date from the US election.
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Three founders, one decision
Definitions and the employee-side rules are on ESOPs after the Delaware flip; the flip sequence and its section 351, 367, CFC and QSBS checklist are on the Delaware flip from India and flip cost and timeline. This page assumes a corporation, because restricted stock is a corporation’s instrument; whether to form one or an LLC in the first place is on US LLC vs C-corp for Indian founders. Two points carry the decision: section 83 bites on stock conditioned on future performance of substantial services (section 83(c)(1)), and a transfer occurs when beneficial ownership is acquired (26 CFR 1.83-3(a)(1)), so for founder stock issued at incorporation the 30 days in section 83(b)(2) run from the issue date. The last column is our reading.
| Founder type | US consequence of filing, and of not filing | India consequence | What to do |
|---|---|---|---|
| Direct incorporator who stays and works in India | Nonresident alien working in India: foreign-source compensation (26 USC 862(a)(3)) outside US gross income (s.872(a)), so nothing is taxed at vesting, filed or not; filing at par reports zero income (Rev. Proc. 2012-29, Example 1) and later growth is capital gain. | ODI from the first share, any percentage (OI Rules 2022, rule 2(q)); UIN before acquisition, remittance or not (OI Regulations 2022, reg. 9(2)). Settle whether any employer allotted the stock (s.17(1)(d)). | File by mail within 30 days of the issue date; UIN before the papers issue the shares. State: where to incorporate a US startup. |
| Founder who may relocate to the US during vesting | Residence arrives under the substantial presence test (26 USC 7701(b)(3)(A)); without an election each later tranche is compensation at vesting value, with one, growth is capital gain. | Indian residence turns on 182 days if the move is for employment abroad (Income-tax Act 2025, s.6(3)(b)); otherwise the 60-day limb in s.6(2) can keep the founder resident. Confirm which limb applies before counting. Treaty Article 4(2) breaks dual residence and Article 25(2)(a) credits US tax. | File, keep the postmark, count days from the first trip. For Dubai: Indian founder moving to Dubai. |
| Flip founder with an Indian operating company under the parent | Swap shares are received for shares, not services; s.83 attaches only if the flip papers condition them on future services (s.83(c)(1)); with reverse vesting, closing is the transfer date. | Schedule III para 1(2)(i) bars a controlling individual’s ODI in a foreign entity that has a subsidiary; how each founder clears it is on the flip pages. New restricted stock at par is where the s.17(1)(d) question arises. | Decide before closing whether s.83 applies; if so, file within 30 days of closing. Founders’ FEMA position first, per Delaware flip advisory. |
Filing Form 15620 with no SSN or ITIN
The sample election in Rev. Proc. 2012-29 has a line headed “taxpayer’s social security number”. 26 CFR 1.83-2(e) (T.D. 9779, 26 July 2016) requires name, address and taxpayer identification number, signed, and the Rev. Proc. says an election need not follow its sample. Form 15620 (Rev. 4-2025) is the IRS’s optional form; Publication 525 for 2025 names it as one way to make the choice. Box 1 asks for a TIN, and the Privacy Act notice says sections 83(b), 6001, 6011, 6012 and 6109 require the information and missing information may delay or prevent processing. The IRS has published nothing on a filer with no TIN; the evidence column below is practice, not IRS text. The company’s own number, the EIN with no SSN, and whether a founder needs an ITIN at all are on EIN without an SSN and a US bank account from India. Addresses are from the 2025 Form 1040-NR instructions and the Form W-7 instructions (12/2024).
| Route | Evidence to keep | The clock |
|---|---|---|
| Mail to the IRS office where you file a federal return (1.83-2(c)); for a nonresident with no return history, the Form 1040-NR address: Department of the Treasury, Internal Revenue Service, Austin, TX 73301-0215, USA. Give the company a copy (1.83-2(d)); Box 9, company details, is optional. | Courier or registered-mail receipt with the hand-over date; the signed copy; the company’s acknowledgement. | Within 30 days of transfer, or before it (1.83-2(b)); a weekend or holiday thirtieth day rolls to the next business day if postmarked by then (IRC 7503). |
| The TIN box: Box 1 and 1.83-2(e)(1) call for a TIN; missing information may delay or prevent processing; no IRS text covers a filer with no TIN. | Practice, not IRS rule: annotate the box (“applied for” or a nonresident-alien note), keep the copy, verify the wording with your US adviser. | The clock does not wait for a number. |
| ITIN on Form W-7, in parallel: normally attached to a US return unless an exception applies, none naming s.83(b); 7 weeks, 9 to 11 in peak season or from overseas; ITIN Operation, P.O. Box 149342, Austin, TX 78714-9342. | W-7 package and receipt; the ITIN letter. | Longer than 30 days on the IRS’s own figures; the clock does not wait for it, and the IRS has not said how a no-TIN election is processed. |
| The IRS online route leads to the online-account sign-in, which needs an SSN or ITIN and offers ID.me to those without an SSN or US address (as displayed on 30 October 2026). | Submission confirmation, if you hold a TIN; whether a person with no TIN can complete ID.me is not stated, so verify and mail anyway. | Open only to a founder who already holds a TIN. |
What happens if the 30 days are missed
Nothing can be filed late. Section 83(b)(2) fixes the deadline at 30 days after the transfer, and the regulation’s only discretion runs the other way: 1.83-2(f) makes an election irrevocable without the Commissioner’s consent, granted only for a mistake of fact, and a fall in value is not one; a forfeiture after an election brings no deduction either (s.83(b)(1)). For the nonresident alien working in India the vesting-date charge is foreign-source and outside US gross income, so it costs nothing. The founder who relocates during vesting carries the cost: each tranche vesting after US residence begins is compensation at that day’s value, so count days from the first trip; the three-year weighted US test (26 USC 7701(b)(3)(A)) and India’s day-count tests (Income-tax Act 2025, s.6) run at once, and Article 4(2) of the India-US convention breaks a dual-residence year. Shares never conditioned on future services were never substantially non-vested, so there was nothing to elect on.
The India calendar for founder stock in a US company
Founder stock sits in the ODI lane, not the employee lane. The OPI treatment of employee-plan and sweat-equity shares stops at ten per cent without control (the test, and the Form OPI that goes with it, are on ESOPs after the flip), and a founder with ten per cent or more of the votes, a board majority or management control has control under rule 2(c) of the OI Rules 2022, so the stake is ODI and the founder, not the company, files Form FC. Whether stock issued for services is “sweat equity shares” under Schedule III para 1(2)(iii)(f) is for the AD bank to test. Form FC, the UIN and the Annual Performance Report are on LRS vs ODI for Indian founders, and the Late Submission Fee if any of them is missed on the ODI regularisation checklist; Table 3 keeps only the dates that bite on founder stock issued with no dollar moving.
| When | What | Provision |
|---|---|---|
| Before the shares issue | UIN through the AD bank on Form FC; the trigger is remittance or acquisition of equity capital, whichever is earlier, so shares for services or at par with no dollar moving still need it first; not RBI approval. | OI Regulations 2022, reg. 9(2); Master Direction (22 August 2022), para 16 |
| After the shares issue | Form FC, evidence of investment and the Annual Performance Report every 31 December run as for any ODI, and a controlling founder is outside the APR exemption; the dates, the chartered accountant’s certificate and any LRS remittance are on LRS vs ODI for Indian founders. | OI Regulations, regs. 9(1), 10(2) and 10(4) |
| Every 31 July | Return mandatory for a resident, other than not ordinarily resident, holding any asset outside India, regardless of income; the foreign-asset schedule takes the particulars (verify the current form). | Income-tax Act 2025, s.263(1)(a)(ix), (1)(b), (1)(c), (2)(b)(ii) |
| Tax year of allotment or vesting | Perquisite only if a current or former employer allotted the stock free or at a concession, directly or indirectly; India measures the value on the s.17(4)(h) date, not the US transfer date. Valuation, withholding and the cost of acquisition on sale are on ESOPs after the flip. | Income-tax Act 2025, s.17(1)(d), 17(4)(h) |
Is founder restricted stock a perquisite in India?
A question, not a fact. Section 17(1)(d) treats as a perquisite any specified security or sweat equity shares allotted or transferred, directly or indirectly, by the current or a former employer, free or at a concession. A sole founder who draws no salary and subscribes at par to a company he has just formed is on one side of that line; a founder on the Indian subsidiary’s payroll who takes restricted stock from its parent at par, with a repurchase right that lapses with continued service, is close to the other, because “directly or indirectly” reaches a parent’s allotment. Settle it in writing before the shares issue.
If the charge applies, section 17(4)(h) measures it on the date the option is exercised; for restricted stock with no option, that date and the current valuation rule are settled first. That date is not the US transfer date, so a founder can hold an 83(b) election reporting zero income and an Indian perquisite valued later at a higher number. Valuation, withholding and the cost of acquisition on sale are on ESOPs after the flip; employee pools are designed around this on ESOP design.
Frequently asked questions
Can I file Form 15620 without an SSN, and do I have to use the form at all?
Yes, and no. Regulation 1.83-2(e) asks for a taxpayer identification number, not a social security number; the SSN wording comes from the Rev. Proc. 2012-29 sample, which is not mandatory. Form 15620 is itself voluntary; Publication 525 for 2025 describes the choice as a written statement or Form 15620 filed where you file your return, within 30 days. No IRS text covers a filer with no TIN: mail on time with the box annotated, keep the postmarked proof, apply for an ITIN on Form W-7 in parallel and verify the annotation wording with your US adviser.
When is the 83(b) election deadline, and does it run from grant, issue or vesting?
Thirty days after the transfer, and transfer means the day you acquire beneficial ownership: for founder stock, the issue date in the stock purchase agreement, not the board approval or the first vesting date. Section 83(b)(2) and regulation 1.83-2(b) set the 30 days; filing before the transfer is allowed. A thirtieth day on a Saturday, Sunday or legal holiday rolls to the next business day if the election is postmarked by then.
Does a non-resident founder who never moves to the US need an 83(b) election?
Not strictly. A nonresident alien performing every service in India has foreign-source compensation under section 862(a)(3), outside US gross income under section 872(a), so no US tax falls while those facts hold. File anyway: at par equal to fair market value the election reports zero income, makes later growth capital gain and protects you if you later meet the substantial presence test, when each later tranche would otherwise be compensation at vesting value.
I missed the 83(b) election. What now?
There is no late election. Regulation 1.83-2 gives no relief for a late filing and allows revocation only for a mistake of fact. Check three things: whether the shares were ever conditioned on future services (if not, nothing was missed); whether you stay a nonresident alien working in India (then the vesting charge is outside US gross income); whether you may move to the US during vesting (then model each future tranche with US counsel now). India is unaffected.
Does the 83(b) election change what India taxes?
No. India does not recognise it. Section 17(1)(d) of the Income-tax Act 2025 taxes specified securities allotted free or at a concession, directly or indirectly, by a current or former employer as a perquisite. Whether founder stock from a US parent is caught turns on whether an employer allotted it, a live question once you draw salary from the Indian subsidiary, and India measures the value on its own date, not the US transfer date. Valuation, withholding and the cost of acquisition on sale are on ESOPs after the flip.
Issuing founder stock in a US company from India?
Send us the stock purchase agreement, the vesting terms and where each founder draws salary. We will tell you who files, what goes in the TIN box, where to mail, and each founder’s UIN and perquisite position. Who signs each filing is set out on Delaware flip advisory.
Thirty minutes with Prashant Sharma, the founder, who does the work himself. You leave with next steps either way. Email is read by the founder and answered within one working day.
Further reading
ESOPs after the flip · The Delaware flip from India · Flip cost and timeline · LRS vs ODI for Indian founders · ODI regularisation checklist · Where to incorporate a US startup · Founder relocation to Dubai · ESOP design
General information, not advice on your grant, entity or residence. Positions are from the official texts linked above, read on 30 October 2026; IRS processing times are the IRS’s own figures, not Infinilex figures. Where no official rule exists the page says so and marks the step as practice to verify.