IEPF – Investors education and protection fund

IEPF stands for Investors education and protection fund. Investor Education and Protection Fund (IEPF) is for promotion of investors’ awareness and protection of the interests of investors. It was setup protect interests of investors in securities markets. This fund was setup by Government of India

Amounts protected under IEPF

Under IEPF regulations following amounts are to be allocated to IEPF fund if remain unpaid for more than 7 years of date of declarations-

• Amounts in the unpaid dividend accounts of companies
• The application moneys received by companies for allotment of IPOs and securities
• matured deposits with companies
• Matured debentures with companies
• the interest accrued on amounts mentioned in above points
• Grants and donations given to the Fund by the Central Government, State Governments, companies or any other institutions for the purposes of the Fund and interest or any other income received out of the investments made in the fund

Timeline of amount transferred to IEPF

Unpaid dividend account is an account in which companies put all monies related to any dividend that is unpaid. A company need to transfer any amount along with interest to IEPF for dividends that are unpaid or unclaimed for a period of more than 7 years and 37 days from the date of declaration of dividend. Most of the times, dividends are unclaimed if shares are in physical form and a bank account is not linked with the account

Top reasons for dividend does not get claimed

• Investors don’t track their investments and lost track of dividends that they are eligible for
• Companies are not able to locate shareholders as contact and bank account details get changed over a course of time
• individuals are not aware of the investments made by their family members especially their parents and these investments along with related dividends are lost.
• Legal nominees and heirs are not able to stake claim on the assets in case of a no will left by a parent

How to claim unclaimed dividend from company

One can claim the unclaimed dividend by sending a written application to RTA or to the Company’s Registered / Corporate Office address along with (a) copy of PAN Card; (b) a cancelled cheque of your registered bank account; and (c) the original un-encashed Dividend warrant or a duly filled in indemnity letter in the format available on the website of the Company.

How to claim unclaimed dividend from IEPF

Individuals, whose unclaimed dividends / shares have been transferred to IEPF, may claim the same as well as the corresponding dividend by making an application to the IEPF Authority, in Web Form No. IEPF-5 available on www. iepf.gov.in. The shareholder can file only one consolidated claim in a financial year as per the IEPF Rules.

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