Non-Resident Indians (NRIs) are individuals who are citizens of India but reside outside India. According to the Indian Income Tax Act and the Foreign Exchange Management Act (FEMA), an individual is considered an NRI based on the duration of their stay in India during a financial year.
Eligibility Criteria
1. Criteria Under the Income Tax Act
-An individual is treated as an NRI if they are not a resident of India during the financial year.
-A person is considered a resident if they fulfill any of the following conditions:
1. They are in India for 182 days or more during the financial year.
2. They are in India for 60 days or more during the financial year and have stayed in India for at least 365 days in the preceding four years.
-If an individual does not meet these conditions, they are classified as an NRI.
2. Criteria Under FEMA
-An NRI is defined as a person who resides outside India for purposes like employment, business, or any other intention that indicates their stay outside India is indefinite.
-NRIs typically maintain strong ties with India but live abroad for work, education, or other reasons.
3. Common Examples of NRIs
-Working Professionals: Indians working abroad, such as software engineers in the USA or nurses in the Middle East.
-Students: Indian students pursuing long-term courses abroad, who spend significant time outside India.
-Business persons: Individuals who have businesses abroad and live outside India to manage those businesses.
Step-by-Step Procedure to Claim Unclaimed Shares for an NRI
1. Verify the Status of the Unclaimed Shares
-Check with the Company: Contact the company’s Registrar and Transfer Agent (RTA) to confirm the status of the unclaimed shares. You may be required to provide details such as your Folio Number, Demat Account Number, or other relevant shareholder information.
-IEPF Transfer Check: If dividends on the shares have remained unclaimed for seven consecutive years, the shares may have been transferred to the IEPF. You can check the IEPF website to confirm.
2. Collect Required Documents
NRIs will need to prepare several documents for claiming unclaimed shares:
1. Proof of Identity:
-Self-attested copy of your Passport.
-Self-attested copy of Overseas Citizen of India (OCI) or Person of Indian Origin (PIO) card (if applicable).
2. Proof of Address:
-Self-attested copy of a foreign address proof (e.g., utility bill, driver’s license).
3. Bank Details:
-Original Cancelled Cheque Leaf.
-Self-attested copy of a recent bank statement.
4. Demat Account Details:
-Client Master List (CML) from your Depository Participant (if shares are to be credited to your Demat account).
5. Proof of Shareholding:
-Copy of original share certificates (if shares were held in physical form).
6. Additional Documents:
-Indemnity Bond and Advance Receipt, both executed and notarized as required.
-Any additional documents as specified by the company or IEPF Authority.
3. File a Claim with the Company or IEPF (If Applicable)
-Claim Directly from the Company (If Shares Have Not Been Transferred to IEPF): Submit a written request along with all the required documents to the company’s RTA. The company will process your claim and, if everything is in order, transfer the shares to your Demat account.
-Claim from IEPF (If Shares Have Been Transferred to IEPF):
1. Fill Out Form IEPF-5:
-Go to the IEPF Authority’s website and fill out Form IEPF-5 online.
-Submit the form and note the Service Request Number (SRN) for tracking.
2. Submit Physical Documents:
-Print the filled Form IEPF-5 and attach all supporting documents.
-Send the documents to the Nodal Officer of the company at its registered office.
3. Verification by the Company:
-The company will verify your claim and submit a verification report to the IEPF Authority within 30 days.
4. IEPF Authority Processing:
-The IEPF Authority will review your claim. Once approved, the shares will be credited to your Demat account, and any unclaimed dividends will be transferred to your NRI bank account.
4. Transfer of Funds
-In simple terms it means transferring money from one country to another. For Non-Resident Indians (NRIs), it specifically refers to the process of sending money earned or invested in India back to their home country.
-Imagine you’re an NRI who has investments in India, such as shares or real estate, or you receive income from renting out a property. If you want to take this money and move it to your bank account in the country where you live, that’s called repatriation.
Let’s understand with an Example
Suppose an NRI named Priya has unclaimed shares in XYZ Ltd. She last claimed dividends over seven years ago, and the shares were subsequently transferred to the IEPF.
Here’s how Priya would proceed:
1. Document Preparation:
-Priya collects her self-attested Passport copy, proof of address, bank details, and Client Master List from her Demat account.
-She prepares the Indemnity Bond and notarizes it.
2. Form IEPF-5 Submission:
-Priya fills out Form IEPF-5 on the IEPF website and submits it online.
-She prints the form, attaches the documents, and sends them to the Nodal Officer of XYZ Ltd.
3. Verification & Approval:
-XYZ Ltd. verifies her claim and submits a report to the IEPF Authority.
-The IEPF Authority approves the claim, and Priya receives her shares in her Demat account.
Important Points to Note
1. Accuracy of Details: Ensure all documents are accurate and properly attested to avoid delays.
2. Tracking the Claim: Use the SRN to track the status of your claim on the IEPF website.
3. Regular Follow-up: Stay in touch with the company’s Nodal Officer for updates.
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