You can claim unclaimed dividends for an initial period of 7 years directly from the company. After this period, if the dividends remain unclaimed, they are transferred to the Investor Education and Protection Fund (IEPF), from where they can be claimed for a further 25 years.
Understanding the Claim Period for Unclaimed Dividends
The duration for claiming unpaid or unclaimed dividends is divided into two distinct phases, ensuring shareholders have ample opportunity to recover their rightful dues.
Phase 1: Claiming from the Company (Up to 7 Years)
Companies are legally mandated to hold any dividend amounts that remain unpaid or unclaimed. As per Section 125(2)(c) of the Companies Act, 2013, if a dividend remains unpaid or unclaimed for a period of 7 years from the date it became due for payment, the company is required to transfer these funds to the Investor Education and Protection Fund (IEPF). During this initial seven-year window, shareholders can claim their dividends directly from the company that declared them.
Key points for this phase:
- Responsibility: The company holds the unclaimed dividend.
- Action Required: Contact the company's Registrar and Share Transfer Agent (RTA) or the company's secretarial department.
- Documentation: Typically requires identity proof, address proof, share certificate details, and bank account information.
Phase 2: Claiming from the IEPF Authority (Additional 25 Years)
Once the 7-year period elapses and the dividends are transferred by the company to the IEPF, the claim process shifts. These funds, along with any associated shares, are then under the custodianship of the IEPF Authority. From the date of transfer to the IEPF, shareholders have an additional period of 25 years to claim their dividends. After this 25-year period in the IEPF, the funds are escheated to the government, making them no longer reclaimable.
Key points for this phase:
- Responsibility: The IEPF Authority holds the unclaimed dividend.
- Action Required: File an online application (Form IEPF-5) with the IEPF Authority.
- Documentation: More extensive documentation is usually required, including company details, dividend particulars, claimant's identity, and proof of ownership.
Dividend Claim Timeline
Here’s a summary of the claim periods:
| Period Duration | Custodian of Funds | Claim Process | Notes |
|---|---|---|---|
| 0-7 Years | Company | Directly from the company's RTA/Secretarial Dept. | Based on the dividend due date. |
| 7-32 Years | IEPF Authority | Online application (Form IEPF-5) through IEPF portal | From the date of transfer to IEPF (i.e., after 7 years with company). |
Process to Claim Unclaimed Dividends
Claiming unclaimed dividends, whether from the company or the IEPF, involves a structured process.
Claiming from the Company (Within 7 Years)
- Identify Unclaimed Dividends: Check your records, company annual reports, or contact the company's Registrar and Share Transfer Agent (RTA).
- Contact the RTA: Reach out to the company's RTA or the secretarial department. They will provide the necessary forms and details.
- Submit Required Documents: This usually includes a dividend revalidation request, indemnity bond, affidavit, KYC documents (PAN, Aadhaar), and bank account details.
- Verification: The company verifies the documents and, if satisfied, processes the payment.
Claiming from the IEPF Authority (After 7 Years)
- Access the IEPF Portal: Visit the official IEPF website.
- File Form IEPF-5: Complete the online application Form IEPF-5 with all required details, including company name, dividend details, claimant details, and bank particulars.
- Generate Acknowledgement: After successful submission, an acknowledgment is generated, which you should save.
- Submit Physical Documents: Take a printout of the submitted form and send it, along with necessary self-attested documents, to the Nodal Officer of the company whose shares/dividends are being claimed.
- Verification by Company: The company verifies the claim and submits a verification report to the IEPF Authority.
- IEPF Authority Processing: The IEPF Authority then processes the refund and credits the amount directly to the claimant's bank account.
Practical Insight: Keeping accurate records of your investments, including dividend declaration dates and payment statuses, can significantly simplify the claim process if dividends go unclaimed. Regularly update your KYC details with your demat account provider and company's RTA to avoid such situations.
