The term “unclaimed dividend” refers to a dividend that has been declared and made available but has not been claimed within a specified time frame. In India, unclaimed dividends are transferred to the Investor Education and Protection Fund (IEPF) after seven years, where they may be reclaimed under certain conditions.
Contents:
- Unclaimed Dividend Meaning
- How To Check Unclaimed Dividends?
- Unclaimed Dividend Treatment
- What Is Unclaimed Dividend? – Quick Summary
- Unclaimed Dividend Meaning – FAQs
Unclaimed Dividend Meaning
Unclaimed dividends are dividends that a shareholder is owed but has not yet claimed or collected. This can occur due to various reasons, such as a change in address, death of the shareholder, or lack of awareness.
Consider the case of Pratik, a shareholder of Zomato Ltd. who has not claimed dividends for several years due to unawareness. These dividends accumulate over time and are transferred to a separate fund if not claimed within the stipulated time frame, impacting both the shareholder’s income and the company’s financial management.
How To Check Unclaimed Dividends?
To check unclaimed dividends, visit the company or IEPF website, navigate to ‘Investor Relations’ or ‘Shareholder Services’, find ‘Unclaimed Dividend’, enter personal details like name or PAN, and review the list to claim any outstanding dividends following prescribed procedures.
Here is a step-by-step explanation:
- Visit the Official Website:
Start by visiting the official website of the company whose dividends are in question or the Investor Education and Protection Fund (IEPF) website. The IEPF is a government initiative in India designed to protect the interests of investors.
- Navigate to the Relevant Section:
Once the website opens, navigate to the ‘Investor Relations’ or ‘Shareholder Services’ section. This section typically contains information relevant to shareholders, including announcements, annual reports, and dividend details.
- Search for Unclaimed Dividend Section:
Within ‘Investor Relations’ or ‘Shareholder Services’, look for a subsection or a link titled ‘Unclaimed Dividend.’ This section is dedicated to dividends that have been declared but have not been claimed.
- Enter Required Details:
In the ‘Unclaimed Dividend’ section, you will be prompted to enter specific details to access the list of unclaimed dividends. These details may include your Name, Folio Number, or Permanent Account Number (PAN).
- Review the List:
After entering the required details, review the list that appears. It will display any unclaimed dividends associated with the provided information. From here, you can follow the prescribed procedure to claim any unclaimed dividends listed.
Unclaimed Dividend Treatment
Unclaimed dividends, if not claimed within seven years, are transferred to the Investor Education and Protection Fund (IEPF). The IEPF is a government initiative aimed at educating and protecting the interests of investors.
Take an example to understand. Consider that in 2015, dividends were declared in favor of a shareholder of the company Z Ltd. If the shareholder fails to claim these dividends by 2022, they will be transferred to the IEPF. However, this does not mean the shareholder permanently forfeits the right to dividends.
The shareholder can still claim these dividends from the IEPF, but the process is more elaborate. The claimant needs to follow the prescribed procedure, which includes submitting a claim application and ensuring compliance with all the relevant legal provisions and documentation requirements.
This treatment of unclaimed dividends ensures that the funds are safe and can be claimed by their rightful owner, even if it takes an extended period of time.
We hope that you are clear about the topic. But there is more to learn and explore when it comes to the stock market, commodity and hence we bring you the important topics and areas that you should know:
What Is Unclaimed Dividend? – Quick Summary
- An unclaimed Dividend is a dividend that is due but not claimed by the shareholder within a specified period.
- It can occur for various reasons like a change in address or lack of awareness.
- Unclaimed dividends can be checked via the company’s or IEPF’s official website.
- If dividends remain unclaimed for seven years, they are transferred to the IEPF, where they can be reclaimed under certain conditions.
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Unclaimed Dividend Meaning – FAQs
What are unclaimed dividends?
Unclaimed dividends are due to shareholders but have not been claimed within a specified period, leading to their transfer to a separate fund like the IEPF in India.
What is the reason for the unclaimed dividend?
The reasons for unclaimed dividends can include a change in the shareholder’s address, the death of the shareholder, or simply a lack of awareness regarding the dividends declared.
Can I claim unclaimed shares dividend?
Yes, shareholders can claim unclaimed share dividends by adhering to the prescribed procedure and submitting the required legal and documentation requirements, particularly from the Investor Education and Protection Fund (IEPF).
What is the time limit for unclaimed dividends?
The time limit for unclaimed dividends in India is seven years, post which they are transferred to the IEPF, and can still be reclaimed by the shareholder under certain conditions.
Are unclaimed dividends taxable?
Yes, investors used to have an exemption from dividend income because corporations were responsible for paying the dividend distribution tax (DDT). But in February 2020, DDT was removed, and investors now have to pay taxes on dividend income.
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