The Investor Education and Protection Fund (IEPF) was established by the Government of India under Section 125 of the Companies Act, 2013, to deal with unclaimed dividends, shares, debentures, and other financial assets.
It is a centralized mechanism to:
- Protect investors’ hard-earned money from being lost or misused.
- Return unclaimed financial assets to legitimate investors.
- Promote financial literacy and awareness.
Managed by the IEPF Authority, under the administrative control of the Ministry of Corporate Affairs (MCA).
Powers and Role of the IEPF Authority
- Maintain and operate the Fund.
- Decide on claims for refunds.
- Launch investor education programs in collaboration with SEBI/RBI.
- Coordinate with companies and stakeholders for compliance.
- Recover disgorged funds and distribute among aggrieved investors.
Core Functions & Objectives of IEPF
| 🔹 Function | 🔍 Explanation |
| Investor Refunds | Return unclaimed dividends, shares, debentures, deposits, etc., to rightful owners. |
| Awareness Programs | Fund programs and initiatives to spread financial and investor education. |
| Support Legal Actions | Provide financial assistance for legal proceedings protecting investor interests. |
| Utilize Disgorged Amounts | Distribute fines and recoveries from fraudsters to aggrieved investors. |
| Research & Development | Promote innovation in the financial literacy sector and enhance investor outreach. |
Transfer of Shares to IEPF
If dividends are unclaimed for 7 consecutive years, the company must transfer the underlying shares to the IEPF Authority.
- Shares held in demat form: Transfer directly via depository.
- Physical shares: Duplicate share certificate must be issued before transfer.
📄 Form Used: IEPF-4 (with details of shares and shareholder info)
Timeline & Transfer Procedure
7-Year Rule for Unclaimed Amounts
All qualifying amounts remaining unpaid/unclaimed for 7 consecutive years are required to be transferred to IEPF within 30 days from the due date.
🧾 Transfer Procedure (Step-by-Step)
| Step | Action |
| 1️⃣ | Identify unpaid dividends and other amounts annually. |
| 2️⃣ | Send 3-month & 3-week prior notices to shareholders/investors. |
| 3️⃣ | Upload unclaimed dividend data on company website. |
| 4️⃣ | Transfer amount to IEPF via electronic remittance to a specified account. |
| 5️⃣ | File Form IEPF-1 within 30 days of transfer. |
| 6️⃣ | For shares related to unclaimed dividends, file Form IEPF-4 for share transfer. |
Penalties for Non-Compliance
| Offence | Penalty |
| Delay in transferring funds/shares | Interest @12% p.a. on amount due |
| Non-transfer of funds/shares | Company: ₹1 lakh to ₹10 lakhs Officer in default: ₹25,000 to ₹2 lakhs |
| Non-filing of Forms | Penalty under Section 450 & 451 of Companies Act |
Refund from IEPF – Process for Claimants
✅ Who Can Claim?
- Original shareholder or their legal heir/successor/nominee.
📋 Documents Required:
- Online Form IEPF-5 (filed on MCA portal)
- Indemnity Bond (original, on stamp paper)
- Advance Receipt (for acknowledgment)
- Aadhaar, PAN, Demat details
- Share certificate copies / dividend warrants
- Legal documents (e.g. death certificate, succession certificate)
🪜 Refund Process (Step-by-Step)
| Step | Description |
| 1️⃣ | File online IEPF-5 form on MCA portal. |
| 2️⃣ | Send physical documents to the Nodal Officer of the company. |
| 3️⃣ | Company verifies and forwards the claim to IEPF Authority. |
| 4️⃣ | IEPF Authority scrutinizes and processes the refund. |
| 5️⃣ | Amount/shares are credited to claimant’s bank/demat account. |
MCA Forms Related to IEPF
| Form No. | Purpose |
| IEPF-1 | Statement of amounts to be credited to IEPF |
| IEPF-2 | Statement of unpaid/unclaimed amounts (company’s website & ROC) |
| IEPF-3 | Statement of shares liable to be transferred |
| IEPF-4 | Details of shares transferred to IEPF |
| IEPF-5 | Claim application by investor/shareholder |
| IEPF-6 | Statement of amounts transferred under old Act |
| IEPF-7 | Statement of unpaid amounts remaining for 7 years |