A bonus issue is when a company gives additional shares to its existing shareholders for free, based on the number of shares they already own. It’s a way for the company to reward shareholders by increasing their shareholding without requiring them to pay anything. The company converts its reserves or retained earnings into share capital and issues these extra shares proportionally (e.g., 1 bonus share for every 5 shares held). This does not dilute the value of your investment but increases the number of shares you hold while reducing the share price proportionally.
Bonus shares are usually credited to your demat account within 15 to 30 days from the record date announced by the company. The exact timeline can vary depending on the company’s processing speed and the registrar or depository involved. After the company declares the bonus issue and finalizes the record date, the shares are allotted and credited to shareholders’ demat accounts through the Depository Participant (DP). You can keep an eye on announcements from the company or contact your DP for updates.
No, you do not need to pay anything for bonus shares. They are issued free of cost to existing shareholders in proportion to their current holdings. The company capitalizes its reserves to issue these shares, so you simply receive additional shares without any payment or investment from your side
You can check if a company is issuing bonus shares through these sources:
1. Stock Exchange Announcements — Companies announce bonus issues on stock exchanges like NSE and BSE. Visit their websites and look for company disclosures or corporate actions.
2. Company’s Official Website — Check the Investor Relations or Announcements section for news and press releases.
3. Registrar & Transfer Agent (RTA) Websites — RTAs often publish corporate actions, including bonus issues.
4. Financial News Websites & Apps — Platforms like Money control, Economic Times Markets, Money fetch, and Screener.in provide updates on corporate actions.
5. Your Broker’s Platform or Demat Account Portal — Many brokers notify clients about upcoming bonus issues.
The share price is adjusted after a bonus issue to reflect the increase in the number of shares while keeping the overall value of your investment the same.
When a company gives bonus shares, it increases the number of outstanding shares without bringing in any new money. So, to maintain the same market capitalization (total value of the company), the share price is reduced proportionally.
Yes, bonus shares are taxable, but not at the time of receipt. Here’s how taxation works:
1. When You Receive Bonus Shares
No tax is charged when bonus shares are allotted to you.
They are issued free of cost, so there’s no immediate tax liability.
2. When You Sell Bonus Shares (Capital Gains Tax)
Tax applies only when you sell the bonus shares.
The cost of acquisition of bonus shares is treated as zero.
So, the entire sale value is treated as capital gain
You can check bonus share allotment using any of the following methods:
1. Broker/Demat Account – Check holdings in Zerodha, Groww, ICICI Direct, etc.
2. CDSL/NSDL Statement – Log in to your depository account to view updated holdings.
3. Email/SMS Alerts – You’ll get notifications when bonus shares are credited.
4. Company or RTA Website – Visit the company’s Investor Relations page or RTA (e.g., KFintech, Link Intime).
5. NSE/BSE Website – Search the company and check the “Corporate Actions” section.
