What is bonus issue?
Bonus shares are shares issued for free to existing shareholders in a certain proportion.. A company may decide to issue bonus shares instead of giving dividend in cash. After a bonus issue, the number of shares with the shareholder increases, but the value of the investment remains the same.
FOR EXAMPLE:
If an Investor A, holds 100 shares of a company and a company declares 2:1 bonus (that is for every one share he will get 2 shares), A will get 200 shares for free and his total holding will increase to 300 shares. RELATED FACTS: - - Shares must be purchased before the ex-date to be eligible for a bonus.
- The bonus quantity is displayed only after they are credited.
- To know about any corporate actions of current financial year, check this list .
Is bonus issue taxable income?
Bonus shares are not taxable at the time of issue in the hands of shareholder, a shareholder might have to pay capital gains tax if they sell them.
Who is Eligible for Bonus Shares?
Shareholders owning the company's shares before the ex-date and on the record date are eligible to receive bonus shares from the company |