company law

Streamlined Reporting for Unclaimed Dividends: Key Changes and Benefits

Simplified Reporting Process for Unclaimed Dividends and Related Funds

The Government of India has recently enhanced the reporting process for companies managing unclaimed dividends, deposits, and share application refunds. Notably, the number of required forms has been streamlined from five to three. This simplification has been accomplished by merging several forms to ease compliance for companies.

Key Changes in Reporting Process

  • Reduction of Forms:
    • Merged Form IEPF-3 with IEPF-4
    • Combined Form IEPF-7 with IEPF-1
  • Integration with Bharatkosh:
    • Fund transfers to the Investor Education and Protection Fund (IEPF) are now facilitated through the MCA21 portal, supporting Straight Through Processing (STP) without any manual intervention.

Benefits of the Enhanced Process

The improvements to the reporting process mean that claimants can now retrieve all transferred amounts via a single claim, significantly streamlining the refund procedure. With these advancements, the number of steps for investors is reduced, thereby enhancing user experience and efficiency.

Financial Overview of the IEPF Authority

As reported at the end of the fiscal year 2023-24, the financial status of the IEPF Authority is as follows:

  • Gross Receipts: ₹8,237.20 crore
  • Net Balance After Refunds and Adjustments: ₹8,107.81 crore

Government Inquiry on Reporting Procedures

In a recent session of the Lok Sabha, under Unstarred Question No. 48 dated 3rd February 2025, inquiries were made regarding:

  • The simplification of the reporting process for companies involved in unclaimed dividends, deposits, and share application refunds.
  • The effectiveness of these changes in facilitating investor claims.
  • Confirmation on whether the total balance in the IEPF Authority exceeds ₹6,000 crore.

The Minister of State for Corporate Affairs, Harsh Malhotra, confirmed the changes and provided insights into the overall financial health of the IEPF Authority, underlining the government's commitment to improving processes related to investor funds.