{"id":45348,"date":"2022-07-14T17:56:04","date_gmt":"2022-07-14T12:26:04","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=45348"},"modified":"2022-07-14T17:56:06","modified_gmt":"2022-07-14T12:26:06","slug":"what-is-unclaimed-dividend-how-to-claim-it-from-iepf","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/what-is-unclaimed-dividend-how-to-claim-it-from-iepf\/","title":{"rendered":"What is Unclaimed Dividend: How to Claim it from IEPF?"},"content":{"rendered":"\n<p class=\"has-drop-cap\">Ministry of Corporate Affairs (MCA) notified\nInvestor Education and Protection Fund Authority (Accounting, Audit, Transfer\nand Refund) Rules,2016, on 5th September 2016. As stated in this Rule, all\ncompanies must identify and provide details of their Unclaimed Dividend. This\nRule talks about the transfer as well as a refund of such Dividends. In this\nblog, we will find the meaning of such Dividends and how to claim them from\nIEPF.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/what-is-unclaimed-dividend-how-to-claim-it-from-iepf\/#Meaning_of_Unclaimed_Dividend\" >Meaning of Unclaimed Dividend<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/what-is-unclaimed-dividend-how-to-claim-it-from-iepf\/#Difference_between_Unpaid_and_Unclaimed_Dividends\" >Difference between Unpaid and Unclaimed Dividends<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/what-is-unclaimed-dividend-how-to-claim-it-from-iepf\/#Investor_Education_and_Protection_Fund\" >Investor Education and Protection Fund&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/what-is-unclaimed-dividend-how-to-claim-it-from-iepf\/#Investor_Education_and_Protection_Fund_IEPF_Authority\" >Investor Education and Protection Fund (IEPF)\nAuthority&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/corpbiz.io\/learning\/what-is-unclaimed-dividend-how-to-claim-it-from-iepf\/#Transfer_of_Unclaimed_Dividends_to_IEPF\" >Transfer of Unclaimed Dividends to IEPF&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/corpbiz.io\/learning\/what-is-unclaimed-dividend-how-to-claim-it-from-iepf\/#Recovery_of_Unclaimed_Dividend_from_IEPF\" >Recovery of Unclaimed Dividend from IEPF<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/corpbiz.io\/learning\/what-is-unclaimed-dividend-how-to-claim-it-from-iepf\/#Conclusion\" >Conclusion&nbsp;<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Meaning_of_Unclaimed_Dividend\"><\/span>Meaning of Unclaimed Dividend<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Share in profits made by a company distributed to\nevery shareholder is termed a dividend. Quantity and quality of Dividends are\ndecided and declared by the Board of Directors. There can be a final or interim\nDividend, where the final is declared at the end of the financial year, and the\nDividend declared on a quarterly or half-yearly basis is an interim Dividend.\nDividends are paid on a pre-determined date; if declared Dividends are not paid\nuntil the pay-out date, it is called Unpaid Dividends.<\/p>\n\n\n\n<p>A <a href=\"https:\/\/corpbiz.io\/learning\/dividend-declaration-sources-mandatory-conditions-and-procedure\/\"><strong>dividend<\/strong><\/a> paid by the company but not yet claimed or taken by the shareholder is called an Unclaimed Dividend. It is paid by the company on demand and is a liability for the company.\u00a0<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Difference_between_Unpaid_and_Unclaimed_Dividends\"><\/span>Difference between Unpaid and Unclaimed Dividends<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Unclaimed and Unpaid Dividends are different from\neach other. If a company pays dividends to its shareholders, they should claim\nthe paid dividends, so unclaimed dividends are recoded when a shareholder fails\nto claim its paid dividends. When a company fails to distribute dividends to\nshareholders after they have been announced, such dividends are called unpaid\ndividends. Such dividends are needed to be claimed by shareholders within 30\ndays of declaration of such dividends. Such dividends are kept in a separate\nunpaid dividend account.&nbsp;<\/p>\n\n\n\n<p>Before 2000, all dividends were sent by cheque or dividend warrants. Most of the dividends become unclaimed due to some reasons such as change of address, incorrect address, etc. If dividends are not claimed for more than seven years, the company sends such dividends to Investor Education and Protection Fund account. And a shareholder has the right to claim such dividends from the IEPF at any given point of time.\u00a0<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Investor_Education_and_Protection_Fund\"><\/span>Investor Education and Protection Fund&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong>Investor Education and Protection Fund<\/strong><sup><a href=\"https:\/\/www.iepf.gov.in\/content\/iepf\/global\/master\/Home\/Home.html\"><strong>[1]<\/strong><\/a><\/sup>, commonly known as IEPF, is for the promotion of investors&#8217; awareness and protection of their interests. It is utilised for the followings:<\/p>\n\n\n\n<ul><li>Refund of unclaimed dividends, matured debentures, matured      deposits, application money due for refund and interest.\u00a0<\/li><li>Promotion of investor&#8217;s education, protection and awareness<\/li><li>Distribution of disgorged amount among eligible and identifiable      applicants for shares or debentures, debenture-holders, shareholders or depositors who have suffered losses because of any other person, as per the court&#8217;s order of disgorgement<\/li><li>Reimbursement of all legal expenses incurred in pursuing the class      action suit under Sections 245 and 37 by members, debenture-holders or      depositors as sanctioned by Tribunal\u00a0<\/li><li>Any other purpose incidental thereto, in accordance with such rules      as prescribed, that the investor whose amounts as mentioned under Clauses (a)-(d) of Sub-section (2) of Section 205C is transferred\/sent to Investor Education and Protection Fund (IEPF), after the period of seven years expires, according to the Companies Act, 1956, is entitled to get a refund from the Investor Education and Protection Fund in respect of such claims as per the rules made under this Section.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Investor_Education_and_Protection_Fund_IEPF_Authority\"><\/span>Investor Education and Protection Fund (IEPF)\nAuthority&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>To administrate the Investor Education and\nProtection Fund (IEPF), the Government of India established Investor Education\nand Protection Fund Authority on 7th September 2016, under Section 125 of the\nCompanies Act, 2013.<\/p>\n\n\n\n<p>Apart from taking care of the Investor Education Protection\nFund (IEPF) administration, the Authority is also entrusted with making refunds\nof shares, unclaimed dividends, matured deposits or debentures etc., to\ninvestors and also for promoting awareness among investors.<\/p>\n\n\n\n<p>All such dividends that are transferred to the\nInvestor Education and Protection Fund Authority after the expiry of seven\nyears need to be recovered from it by the investors with the help of an expert.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Transfer_of_Unclaimed_Dividends_to_IEPF\"><\/span>Transfer of Unclaimed Dividends to IEPF&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>An amount transferred to the Unpaid Dividend Account\nof the Company, which is unpaid or unclaimed for more than Seven Years, is\ntransferred along with the accrued interest to Investor Education &amp;\nProtection Fund (IEPF), and the company then send a statement in Form IEPF-1\nwith the details of such transfer to the IEPF Authority. The Authority then\nadministers the said Fund and issues a receipt to the company as evidence of\nsuch transfer.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Recovery_of_Unclaimed_Dividend_from_IEPF\"><\/span>Recovery of Unclaimed Dividend from IEPF<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Rule 7 of Investor Education and Protection Fund\nAuthority (Accounting, Audit, Transfer and Refund) Rules, 2016 has provided the\nwhole procedure for recovery of such dividends from the IEPF. An investor can\nclaim Unclaimed or Unpaid Dividends, matured debentures, matured deposits,\napplication money due for refund, interest, sale proceeds of fractional shares,\nredemption proceeds of preference shares etc., from IEPF by following the\nspecific procedure provided under this Rule.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Points under Rule 7 relating to recovery of\nUnclaimed Dividend&nbsp;<\/h3>\n\n\n\n<p>Essential points mentioned under Rule 7 related to\nthe recovery of such dividends are as follow:<\/p>\n\n\n\n<ul><li>Any person whose unclaimed Dividend and shares are transferred to      the Investor Education and Protection Fund (IEPF) can claim them from the IEPF Authority by filing an application in Form IEPF 5 along with the prescribed fee. The fee is, from time to time, decided by the Authority in consultation with the Central Government.<\/li><li>After making such an application in Form IEPF 5, the claimant sends      the same by duly putting his signature on it along with all the required      documents as provided or stated in the application to the concerned      company. The application is sent to the registered office of the Concerned company for the verification of all the claims of the claimant.\u00a0<\/li><li>Company sends a verification report to the IEPF Authority in a      format that the Authority itself specifies within fifteen days from the      date of receipt of claims. Such verification report is sent with the      claimant&#8217;s documents submitted to the company.\u00a0<\/li><li>After verification of all the entitlement of the claimant, the      Authority takes the relevant action as stated below:<\/li><li>In case of the amount claimed, the Authority and Drawing and Disbursement Officer of the Authority present a bill to the Pay and Account Office for payment as per the guidelines provided<\/li><li>In case of shares claimed, the Authority issues a refund sanction order with the approval of the Competent Authority and credits the shares to the DEMAT Account of the claimant to the extent of entitlement of the claimant.<\/li><\/ul>\n\n\n\n<p>The Authority then,\nin its records, makes a note of all the payments made.&nbsp;<\/p>\n\n\n\n<ul><li>Application for recovery of such dividends under this Rule 7 that      the concerned company duly verifies is disposed of by the Authority within sixty days from the date of receipt of the concerned company&#8217;s verification report. Any delay beyond the sixty days is recorded in writing, mentioning specific reasons for such delay, and then the same is communicated to the claimant in writing or by any electronic means.<\/li><li>If the application of the claimant is considered incomplete or not      approved, then communication is sent to the claimant and concerned company by the Authority highlighting all the deficiencies of the      application.\u00a0<\/li><li>If the claimant here is a legal heir, successor, administrator or      nominee of any registered shareholder, then he has to ensure that the      transmission process is complete by the concerned company before the initiation of the filing of the application.<\/li><li>If the claimant is a legal heir, successor, administrator or nominee of any other registered shareholder or if a request for transfer of shares or transmission of shares is received after the transfer of shares by the company to the Authority, then the company verifies all the      documents required for registering transfer or transmission and issues a letter to the claimant indicating his entitlement to said security and furnish a copy of same to Authority while verifying the claim of such claimant.<\/li><li>The claimant files only one consolidated claim in a financial year in respect of a company.\u00a0<\/li><li>The company is liable in all situations to indemnify the Authority if any dispute or lawsuit is initiated due to any inconsistency or      disparity in the verification report, and Authority is not liable to      indemnify the shareholder or company for any liability arising out of any discrepancy in verification report submitted leading to litigation or complaint arising thereof.\u00a0\u00a0<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Documents required for recovery of Unclaimed\nDividends&nbsp;<\/h3>\n\n\n\n<p>All requisite documents required for recovery of\nclaims from the Investor Education and Protection Fund are as follows:<\/p>\n\n\n\n<ul><li>Copy of duly filled Form IEPF 5 and acknowledgement generated with\n     unique Service Request Number (SRN)<\/li><li>Indemnity Bond with claimant&#8217;s signature<\/li><li>Advance stamped receipt with revenue stamp and signature of\n     claimant and witnesses<\/li><li>In the case where securities are held in physical form, then an\n     originally matured debenture, deposit or share certificate<\/li><li>In case securities are held in DEMAT form, then a copy of the\n     transaction statement<\/li><li>Self-attested copy of Aadhaar Card<\/li><li>Poof of entitlement, i.e., certificate of share, interest warrant\n     application number, etc.<\/li><li>Cancelled cheque<\/li><li>If the claimant is an NRI, then a copy of passport, an overseas\n     citizen of India (OCI) and Person of Indian Origin card.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Procedure for recovery of unclaimed dividends from\nIEPF<\/h3>\n\n\n\n<p>The process for claiming such dividends from IEPF\nis as follows:<\/p>\n\n\n\n<ul><li>The claimant files IEPF Form 5 and submits the same to the Ministry      of Corporate Affairs.<\/li><li>Then the claimant submits Form 5 with the required documents to the      Nodal Officer of the concerned company at the registered office in an      envelope with a mark on it &#8220;Claim for a refund from IEPF      Authority&#8221;.<\/li><li>After receiving the same, the concerned company verifies Form 5 and      sends a verification report to the IEPF Authority.<\/li><li>IEPF Authority examines the documents and amount transfers from the company to the IEPF Authority.<\/li><li>Then the Authority releases refunds in favour of the claimant. The      Fund is released to the claimant&#8217;s bank account linked to his Aadhar      Card.\u00a0<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Dividends paid by the company to the shareholder but not claimed by such shareholders are known as unclaimed dividends. If shareholders do not claim such dividends for seven years, they are transferred to IEPF. Then the shareholder can claim such dividends from the IEPF Authority. The specific procedure for recovering or refunding such dividends is provided under Rule 7 of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016. <\/p>\n\n\n\n<p class=\"text-left\"><b>Read our Article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/unpaid-dividend-account\/\">Unpaid Dividend Account: Norms under Companies Act, 2013<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Ministry of Corporate Affairs (MCA) notified Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules,2016, on 5th September 2016. As stated in this Rule, all companies must identify and provide details of their Unclaimed Dividend. This Rule talks about the transfer as well as a refund of such Dividends. In this blog, [&hellip;]<\/p>\n","protected":false},"author":36,"featured_media":45353,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[160],"tags":[2502],"acf":{"service_id":"227"},"authorName":"Shambhavi Suyesha","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2022\/03\/IMG-20220324-WA0005.jpg","authorDescription":"Shambhavi holds a strong legal background, having completed her BA LLB and LLM. She is particularly interested in legal research and writing, and wishes to utilise her knowledge to create informative legal content. She is an analytical researcher and keeps herself updated about the current legal affairs. She also holds prior experience in publishing articles on assorted legal areas.","postViews":11329,"readingTime":6,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/45348"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/36"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=45348"}],"version-history":[{"count":17,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/45348\/revisions"}],"predecessor-version":[{"id":45367,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/45348\/revisions\/45367"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/45353"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=45348"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=45348"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=45348"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}