IEPF Forms: Forms of Investor Education and Protection Fund

The Investor Education and Protection Fund (IEPF) serves as a safety net for investors in India. Established in 1999, it aims to promote investor awareness and protect their interests by collecting unclaimed or unpaid amounts from companies. It includes dividends, deposits, and debentures that have remained unclaimed for seven years. Companies use specific IEPF forms to report and transfer these amounts, while investors use forms to claim their due payments. These forms can be submitted through the MCA Portal by logging in and navigating to the 'Company E-filing' section. This guide covers IEPF forms, their types, fees, penalties, and submission instructions on the MCA Portal. This guide explains the IEPF Form, its types, fees, penalties, and how to submit the forms on the MCA Portal. Simplify your business compliance with IndiaFilings' expert MCA services! [shortcode_81]

What is the Investor Education and Protection Fund (IEPF)?

The Investor Education and Protection Fund (IEPF) was established under Section 205C of the Companies Act, 1956, to promote investor awareness and safeguard their interests. According to the Amendment Act, once individual amounts remain unclaimed and unpaid for seven years from the date they are due for payment, they are credited to the IEPF. After this period, no claims can be made against the Fund or the respective company for these amounts. Various sums are transferred to the IEPF, including those in unpaid dividend accounts, application money for securities due for refund, matured deposits and debentures with companies, accrued interest on these amounts, and grants or donations from the Central or State Governments, companies, or other institutions.

What is an IEPF Form?

An IEPF Form is a standardized document used to claim unclaimed dividends, matured deposits, debentures, or other amounts that have been transferred to the Investor Education and Protection Fund (IEPF). These forms are a crucial part of the IEPF's process to ensure that rightful claimants can retrieve their due amounts even after they have been transferred to the Fund. To claim these amounts, individuals must fill out and submit the appropriate IEPF Form, which includes detailed information about the claimant and the amounts being claimed. The form must be submitted along with the required supporting documents to validate the claim. This process helps maintain transparency and ensuring that unclaimed funds are eventually returned to their rightful owners.

What are the Various Types of IEPF Forms?

The Investor Education and Protection Fund Authority (IEPFA) uses various forms to facilitate the transfer of unclaimed and unpaid amounts from companies/banks to the IEPF and for investors to claim these amounts. Here are the list of the key IEPF forms: For Companies/Banks:

Form IEPF-1 & IEPF-1A: These forms are used to report amounts credited to the IEPF.
- IEPF-1: Used by companies/banks to file a statement of amounts transferred to the IEPF or shares transferred due to unclaimed dividends. The IEPF-3 Form is merged as per the MCA's recent update.
- IEPF-1A: A simplified version of IEPF-1 for companies/banks reporting only amounts credited to the IEPF (excluding shares).
Form IEPF-2: This form is used by companies/banks to report unclaimed and unpaid amounts. It includes details like:
- Unclaimed dividends
- Unpaid deposits
- Unpaid debentures
- Unclaimed application money
- Unclaimed interest on deposits/debentures/application money
- Unclaimed redemption amounts of preference shares
- Unclaimed sale proceeds of fractional shares
- Amounts received under specific company law sections
- Details of the designated account maintained by the company/bank for holding these unclaimed amounts for 7 years before transferring them to the IEPF.
- Investor-wise details of the unclaimed amounts (filed as an attachment).
Form IEPF-4: This form is used by companies/banks to report details of shares transferred to the IEPF due to unclaimed dividends. It's required when a company/bank transfers shares to the IEPF account as per section 125 of the Companies Act. Exemptions exist if a court order or other statutory authority prevents the transfer. In such cases, details must be filed within 30 days of the financial year-end.
IEPF-5 E-Verification Report: This online report is submitted by the company/bank to the IEPFA within 30 days of receiving a claim from an investor. It verifies the details of the claim submitted in Form IEPF-5 and includes scanned copies of documents submitted by the claimant.

For Investors:

Form IEPF-5: This online form allows investors to claim unpaid amounts and shares held by the IEPF. It can be filed by the investor themselves or a deceased investor's legal representative. The IEPF authority may seek additional information from the concerned company/bank for clarification.

How to Access and Submit the IEPF Form on the MCA Portal?

Here are the general step-by-step instructions to access and submit the IEPF Form on the MCA Portal,

Access MCA Homepage: Visit the Ministry of Company Affairs website
Login: Access the MCA portal using your valid credentials (username and password).
Navigate to IEPF Services: Go to "MCA Services" and select "Company E-Filing". Within this section, find "IEPF Services".
Select the IEPF Form: You must submit the specific IEPF form (e.g., IEPF-2 for unclaimed and unpaid amounts).
Fill Up the Application: Carefully fill out the details in the IEPF form.
Save as Draft (Optional): You can save the partially filled form as a draft for later completion.
Submit the Webform: Once complete, submit the IEPF form electronically.
SRN Generation: A Service Request Number (SRN) will be generated upon successful submission. This number is crucial for future communication with MCA regarding the form.
Validation Stage (Applicable for IEPF-2): If your form requires investor details validation (like IEPF-2 - purpose 1), it will be marked as "Pending for Investor details validation."
Download PDF: Download a PDF copy of the submitted form for your records.
Affix DSC (Digital Signature Certificate): Sign the downloaded PDF document with your valid Digital Signature Certificate (DSC).
Upload Signed PDF and Investor Data: Upload the DSC-signed PDF document and any required investor data files (like Excel sheets) onto the MCA portal.
Pay Fees: Pay the necessary fee to submit the IEPF form. Note: There's a strict deadline for uploading the signed PDF and completing the payment. Failure to meet this deadline will result in the cancellation of the SRN.
Acknowledgement: Once the signed PDF, data files (if applicable), and fees are successfully uploaded, an acknowledgement will be generated. This confirms your IEPF form submission.

Filing Fee for IEPF Form

The filing fees for IEPF forms vary based on the company's nominal share capital. These fees are determined per the Companies (Registration of Offices and Fees) Rules, 2014. It's important to note that there are exceptions. There is no filing fee required for IEPF-5, the form used by investors to claim unpaid amounts and shares, nor is there a fee for the IEPF-5 e-verification report submitted by companies/banks.

Penalty for IEPF Form Non-Compliance

The penalty for IEPF Forms depends upon their late filing. Based on the period of delay, 2 to 12 normal fees will be charged. However, for IEPF-5, e-verification reports may incur an additional delay fee of Rs. 50 per day, maximum up to Rs. 2,500. And no penalty was charged for the IEPF-5 form.

MCA Latest Updates:

MCA Announces Amendments to Investor Education and Protection Fund Authority Rules

On October 3, 2024, the Central Government issued a notification regarding amendments to the Investor Education and Protection Fund Authority (Form of Annual Statement of Accounts) Rules, 2018. This amendment, referred to as the Investor Education and Protection Fund Authority (Form of Annual Statement of Accounts) Amendment Rules, 2024, aims to enhance clarity within the existing regulations. The key change specifies that in Rule 5, Sub-rule (2), the term "one Member" will be replaced with "the chief executive officer." These amendments will take effect immediately upon their publication in the Official Gazette. [pdf-embedder url="https://www.indiafilings.com/learn/wp-content/uploads/2024/07/MCA-IEPFA-Amendment-Rule-2024.pdf"]

MCA Waives off Additional Fees & Extends the Deadline for IEPF Forms

On 16th July 2024, MCA released a circular regarding waiving off the additional fees and extension of the deadline. The Ministry of Corporate Affairs (MCA) is transitioning from MCA 21 version 2 to version 3. To ease this transition, they waive the additional fees for filing various IEPF e-forms (IEPF-1, IEPF-1A, IEPF-2, IEPF-4) and e-verification of claims (IEPF-5). This fee waiver is in effect until August 16, 2024. Additionally, there is a one-time relaxation for filing e-verification under a specific rule of the IEPFA Rules until the same date (August 16, 2024). [pdf-embedder url="https://www.indiafilings.com/learn/wp-content/uploads/2024/07/mca-notification-on-waives-off-additional-fees-and-extension-of-deadline.pdf" title="MCA notification on waives off additional fees and extension of deadline"]

MCA Merges IEPF-3 with IEPF-4 & IEPF-7 with IEPF-1 and Change in Payment Process

On 17 July 2024, MCA released a notification on merging IEPF forms and changing the Payment Process. The circular introduces several changes to simplify filing IEPF-related forms in MCA Version 3. To reduce the compliance burden and streamline filings, the Ministry is merging two sets of forms: IEPF-3 will be merged with IEPF-4, and IEPF-7 will be merged with IEPF-1. The revised forms will also be made STP (Straight Through Processing), which may automate some aspects of the filing process. The way companies pay their IEPF contributions is changing. Previously, companies used Form IEPF-7 to report amounts transferred to the IEPF. These payments will be made online on MCA 21 via the "Pay Miscellaneous Fee" service after selecting the "Investor Education and Protection Fund" option. [pdf-embedder url="https://www.indiafilings.com/learn/wp-content/uploads/2024/07/mca-notification-on-merges-IEPF-forms-and-chane-in-payment-process.pdf" title="MCA notification on merges IEPF forms and change in payment process"]

Conclusion

The Investor Education and Protection Fund is crucial in safeguarding investor interests in India. By establishing a clear process for handling unclaimed amounts and providing dedicated forms for both companies and investors, the IEPF fosters a transparent and accountable system. This helps investors by offering a mechanism to recover their rightful dues, even after they have been transferred to the Fund. Understanding the various IEPF forms and the process for accessing and submitting them is crucial for companies and investors to ensure timely management of unclaimed funds. Choose IndiaFilings for seamless and efficient MCA filings and compliance! [shortcode_81]