Have you claimed your dividend but? Here’s the right way to get a refund

One of the perks of proudly owning shares of any firm is the dividends—the revenue or surplus that’s distributed amongst shareholders. Dividends that aren’t claimed by shareholders for greater than seven years are transferred to the Investor Education and Protection Fund (IEPF). This fund was arrange by the federal government to advertise consciousness and shield the curiosity of traders.

“Earlier, dividend was paid by issuing cheques or warrants within the names of shareholders. In case of an incorrect handle, the dividend wouldn’t have been credited to the shareholder. Even with the direct financial institution transfers, dividends might stay unclaimed if the shareholder’s checking account linked with the demat account is both closed or inactive or isn’t up to date as per the core banking system,” said Snehal Katrani – Group Head Compliance and Legal, Prabhudas Lilladher.

As the season of annual general meeting (AGM) of companies for FY22 kicks in, it’s time for shareholders to take notice of any unclaimed dividends.

Within 60 days of holding an AGM, companies update the list of investors who have not claimed dividend in the last seven years. The unpaid dividend details along with the shareholder’s last known address and due date on which such shares will be transferred to the IEPF are made available on the company’s website, according to Ajay Shaw, Partner, DSK Legal.

To get a refund, you need to write to the company or its registrar and transfer agent with supporting documents.

Refund from IEPF

Once shares are transferred to the IEPF account, they get debited from your demat account. If shares are held in physical form, they are deemed to be cancelled. Vinay Butani, parter, Economic Laws Practice, said “After shares are moved to the IEPF account, the voting rights on the shares shall be frozen and any further dividend on such shares shall be credited to the fund until claimed by the rightful owner.”

For the unclaimed dividend and respective shares, you have to submit Form IEPF-5 on-line on the IEPF web site. No timeline has been prescribed for claiming such refund, in line with Atul Pandey, Partner, Khaitan & Co.

On profitable submission, an acknowledgement will likely be generated indicating the SRN (service request quantity). Then, you have to submit an authentic copy of indemnity bond, copy of acknowledgement and IEPF-5 kind together with different supporting KYC paperwork to the nodal officer appointed by the corporate.

After the applying is verified and accredited by the corporate, the refund will likely be launched by the IEPF authority to your checking account. In case of any grievances, you possibly can lodge a grievance with Sebi on SCOREs platform. However, it’s obligatory to method the middleman or firm first earlier than complaining to Sebi, mentioned Maneet Pal Singh, Partner, I.P. Pasricha & Co.

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