In response to our Big Story, ‘Unlock your unclaimed assets’, in bl.portfolio edition dated March 2, explaining about the process of claiming ownership of unclaimed equity shares of listed companies, typically purchased in physical form, in the pre-dematerialisation era, we received many queries and feedback pertaining to the process. Here are key feedbacks and queries addressed:
Delays at the end of IEPF
Many readers complained about the undue delays observed in processing by the Investor Education and Protection Fund (IEPF). While one reader has been waiting for around 22 months, another has received no response for around 36 months. Mails sent to the Ministry of Corporate Affairs and the Finance Ministry were also noted to be unanswered, while a personal visit by a reader to the IEPF Authority in New Delhi also yielded no results.
bl.portfolio says:
For now, there are specific timelines within which the RTA and the respective company must complete their side of processing, in this case of transmission of shares. But unfortunately, IEPF is not subject to any such timelines within which the claim needs to be processed by them. As explained in our Big Story, claiming it back from the IEPF could be time-consuming and the average time taken for IEPF to approve or reject a claim is typically in the range of six months to three years.
As readers suggested, a timeline set for IEPF to process these claims would be ideal. In a future edition, we will write on how such delays can be addressed after speaking to experts in the field.
How to assess the current status of a company whose physical shares are held
We also received questions from few readers who had purchased shares in the 1990s and unable to assess current position of the company.
bl.portfolio says:
To check if the respective companies exist now, you can try out the BSE and NSE websites to locate them, if they continue to be listed.
Sometimes, the company could have changed its name or could have even been delisted. So, some preliminary research will also help you find the current status of the company.
If it is still a listed company, you will have to find the Registrar and Transfer Agent (RTA) of the company. The stock exchanges provide you the information.
In case of the NSE:
* Search the company in the search tab and select it
* Click on COMPANY DIRECTORY from the side tab
* Click on TRANSFER AGENT DETAILS tab in the new screen
* You will find the details of the RTA displayed.
In case of the BSE:
* Search the Company and click on it
* Click on CORPORATE INFORMATION from the side tab
* You will find the details of the RTA displayed
As discussed in the Big Story, the next set of processes start with the RTA and you have to submit the required documents to claim your unclaimed shares.
Tax implications on sale of shares by the inheritor or nominee
An account holder having an active demat account with nomination passed away a couple of years ago. Shares in demat account were transferred to the nominee’s demat account. A reader wanted to understand the tax implications in such a scenario.
bl.portfolio says:
Post-transmission, the rules for holding period and the cost of acquisition gets tweaked as follows:
Holding period: The period for which the deceased held the shares will also be considered as ‘Period od holding,’ when the shares are being sold by the inheritor/ nominee to whom the shares were transferred by way of transmission.
Hence, if the listed shares were held by the original holder for more than one year, even if the shares are immediately sold by the inheritor/ nominee, the gains/ losses will be considered as long-term capital gains or long-term capital losses, as the case maybe.
Cost of acquisition: The cost of acquisition (which gets subtracted from the selling price to compute the gains or losses) of such shares being sold will also be the cost at which the original holder of the shares purchased it.
