If you are a non-resident Indian, the Indian share market may not be of particular interest to you. However, it might pay to keep track of happenings in the market.
Understanding the Indian financial market landscape
In 2016, the government of India created the Investor Education and Protection Fund (IEPF) to educate investors and safeguard them from losing control of their assets and stock. Numerous examples exist of investors forgetting to appoint a nominee for their stock ownership. This implies that if an investor dies, their investments, as well as any unclaimed dividend money, are passed to the government. Unless the investor’s lawful heirs file a claim, the government may spend these monies as it sees proper. The IEPF permits and encourages investors to contact the government to request dividends and to have their long-forgotten shares repaid, allowing for the recovery of lost shares. The IEPF was created with the best interests of shareholders in mind, and it aims to protect investment funds while also raising awareness about the issue.
NRI shareholders must claim dividends not just to get payment, but also to appropriately report the increased income on their tax returns. They must also be careful of deposits made in their NRO accounts, if any. If the dividends are not claimed within 30 days after the declaration date, the corporation must deposit them in a special unpaid dividend account. The corporation is expected to send the money to IEPF if the payout is not collected within the following seven years.
How to make your claim as an NRI
NRIs can apply for their dividend by filling out Form IEPF 5 online. The company’s registration and transfer agent should receive a request letter (RTA). The folio number in the case of physical shares, or the depository participant ID and client ID in the case of electronic shares, as well as the period for which the dividend has not been received, should be included in the request letter. After submitting an online Form IEPF-5 in accordance with regulation (1), the NRI or claimant must deliver the form, fully signed, together with the following documents: Copy of Acknowledgement, Indemnity Bond, Advance Stamped Receipt, Copy of Aadhar, Canceled Cheque, Original Certificate, Proof of Entitlement, and Copy of Passport.
The company will send a verification report to IEPF Authority within 15 days of the receipt of the claim form and after verification; the authority shall present a bill to the Pay and Accounts Office for e-payment as per the guidelines. The authority shall then issue a refund sanction order with the approval of the Competent Authority and would credit the shares which are lying with the depository participant in the IEPF suspense account.
The Authority will process any claim that has been adequately confirmed by the relevant company within 60 days of receiving the application. If the claimant is the registered security holder’s lawful heir, successor, administrator, or nominee, he must guarantee that the firm completes the transmission procedure before submitting any claim with the Authority. In a financial year, the claimant may only make one consolidated claim in relation to a corporation.
If the firm fails to comply with any of the conditions of the claimant’s request for dividend, the company will be fined not less than five lakh rupees, but not less than twenty-five lakh rupees. It should be noted that any company officer who is involved in this negligence should face a fine of up to one lakh rupees, with the possibility of going up to five lakh rupees.
Dealing with unclaimed shares
So far, we have discussed the case of NRIs wanting to claim dividend that is due to them. However, there may also be instances where an NRI is unknowingly the rightful claimant of a shareholding that was held by someone in their family. This situation typically happens when an NRI who has been living abroad for years is unaware of the assets held by their family members back home who have passed away. With the extent of the Indian diaspora increasing abroad on a regular basis, these instances are becoming more and more common. It is often the case that the children of a deceased parent are happily settled in different countries around the globe and the assets of the parent are left unclaimed back in India. Even if the children are aware of the existence of such assets, they often shy away from laying a claim because of the perceived complexities and red-tapism in Indian institutions.
This is where Infiny Solutions can help. In addition to our domestic services, we also help NRIs get their due by helping through the procedure of getting unclaimed dividend and unclaimed shares back. We process everything digitally for NRI clients, ensuring that they don’t have to travel to India, unless absolutely necessary.
Proof of success
Such instances come up a lot in the modern world. Recently, we dealt with the Kapoors, who are a well-off family from Mumbai. The son and daughter of the family had both left India for professional commitments. One was working in France and one in Australia. They lost their father a few years ago and were unaware of his penchant for investing. Infiny learned of the unclaimed shares in their father’s name and reached out to his kids via Facebook. As the kids were well educated and well-versed with financial instruments, they got on board rather quickly. Infiny also informed them that the company whose shares their father held had delivered physical shares to his registered address. Upon hearing this, the Kapoors had their cousin search the ancestral home where they were able to find the physical shares that their father held. This also helped Infiny gain further trust of the Kapoors and their full cooperation in the claim process. The Kapoors were delighted with the services of the team at Infiny. They said that Infiny had seamlessly taken care of everything to the extent that even though there are sitting on different continents, they had nothing to worry about and had full faith in the team.
Even if you have been living abroad for years, detached from financial links in India, Infiny Solutions can help you claim what is rightfully yours. If you believe cross-border finances may become a hassle, NRO accounts help you easily maintain what’s yours. The whole claim process is further simplified by the experts at Infiny Solutions who support you from the beginning till the very end when the claim is settled.