The Central Board of Direct Taxes (“CBDT”) has recently issued a circular dated February 03, 2022
409A applies to anyone subject to U.S. federal income taxation who receives non-qualified deferred compensation, including:
US tax residents
Non-residents who earn US source compensation
409A involves the taxation of deferred compensation such as stock options and stock appreciation rights. 409A applies to the compensation that is earned in one period and paid out in a future time period.