Recovery of Unclaimed Dividends as undiscovered fish just waiting to be found. With the right approach—locating the source, starting the process, and using the proper documentation—you can easily recover these funds.
In this way, you won’t miss out on any possible profits, transforming the process into an exciting journey to recover lost profits.
What do you mean by Unclaimed Dividend?
Dividends not claimed by their rightful owners are known as Unclaimed Dividends. Most Unclaimed Dividends result from the death of a shareholder, the failure of legal relatives to know about investments, improper or incomplete address changes, and bank account closures connected to Demat accounts.
After an Annual General Meeting, companies update their list of investors who have yet to claim dividends within sixty days in the previous seven years.
On the company website, you can find information about Unclaimed Dividends, the last known address of the shareholder, and the deadline for Transfer of Shares.
To be eligible for a refund, you must write to the company, its registrar, and the transfer agent, including any required paperwork.
Proceeds to the Investor Education Protection Fund (IEPF), administered by the IEPF Authority (IEPFA), a government agency under the Ministry of Corporate Affairs (MCA), will be transferred, together with any interest earned, from the company’s Unclaimed Dividends account if they haven’t been paid or claimed for more than seven years.
Subsequently, the company informs the IEPFA Authority of the transfer via the Form IEPF-1 statement. The Authority then seizes the money and gives the business a receipt as evidence of the transaction.
How to Claim Dividends from IEPF
According to rules 7(1) of the Investor Education and Protection Fund Authority website (Accounting, Audit, Transfer, and Refund) Rules, 2016 and subsection (3) of Section 125 of the Companies Act, 2013, you must electronically submit Form IEPF-5 for the Unclaimed Dividend and related shares.
The Process for Requesting Such A Refund Has No Deadline.
To get those shares back into your Demat account, you must write to those firms with your KYC documents, the bank’s signature verification, and your Demat account statement showing the transfer of shares to IEPF.
The companies will provide an “Entitlement Letter” following the required verification. You can submit an online IEPF claim and give the companies the necessary papers at that time. The government is handling the IEPF claim alone.
The following mandatory attachments must be received with the IEPF-5 form:
1. Aadhaar cards belonging to the applicant and, if there are joint holders, copies of each of their cards
2. Foreign nationals and NRIs require a Person of Indian Origin (PIO) card, passport, and Overseas Citizen of India (OCI).
3. The Applicant’s Demat Accounts Client Master List.
4. Documentation of eligibility, including the application number, transaction statement, bonds, debentures, fixed deposit receipts, share certificates, interest warrants, and dividend warrants.
After the verification, click “Submit” to start creating the challan.
After successful submission, a Service Request Number (SRN) and acknowledgment are generated. Next, you must provide the company’s nodal officer with an original indemnification bond, an acknowledgment copy, an IEPF-5 form, and any further supporting KYC documentation.
Following the company’s verification and application approval, the IEPF authority will release the refund to your bank account.
Conclusion
Recovering Unclaimed Dividends might seem concerning, but the process is straightforward with these steps: Complete Form IEPF-5 online through the IEPF Authority website, attach the necessary documentation, and submit your application. Once approved, the IEPF will transfer the funds directly to your bank account.
FAQ’s
Q.1 How do you claim unpaid dividends from IEPF?
Ans. To claim unpaid dividends from IEPF, complete Form IEPF-5 online, attach the required documents, and submit them through the IEPF Authority website. Upon approval, funds will be transferred to your bank account.
Q.2 How do you fill out IEPF Form 5 online for dividends?
Ans. Access Form IEPF-5 on the IEPF Authority website, fill in your details, upload the required documents, and submit the form. Follow the instructions carefully to ensure accurate processing.
Q.3 What is the time limit for unpaid dividends?
Ans. There is no time limit for claiming unpaid dividends from the IEPF. You can request a refund anytime, even if the dividends have been unclaimed for years.
Q.4 What if the dividend is not claimed for seven years?
Ans. If a dividend is not claimed for seven years, it is transferred to the IEPF. You can still reclaim it by following the claim process through the IEPF Authority.