Updated: 17 September 2026
Section 125 of the Companies Act 2013: Investor Education and Protection Fund
Section 125 of the Companies Act, 2013 establishes the Investor Education and Protection Fund (IEPF). The provision identifies the money credited to the Fund, the purposes for which the Fund may be used, the right to claim eligible amounts, and the statutory framework for administration, accounts, audit and annual reporting of the IEPF Authority.
What is the Investor Education and Protection Fund?
Under Section 125(1), the Central Government is required to establish a fund called the Investor Education and Protection Fund. In practical terms, the IEPF is the statutory mechanism through which specified unclaimed or unpaid investor amounts and certain related assets are administered, while also supporting investor education, awareness and protection.
Section 125 should be read together with Section 124 on the Unpaid Dividend Account and the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, as amended.
What amounts are credited to the IEPF under Section 125(2)?
Section 125(2) specifies the principal categories of money credited to the Fund. These include Central Government grants, donations, amounts transferred from companies' Unpaid Dividend Accounts under Section 124(5), legacy amounts under the Companies Act, 1956, income from investment of the Fund, and other prescribed investor-related amounts.
| Category | Section 125 position |
|---|---|
| Unpaid dividend | Amounts transferred from the Unpaid Dividend Account under Section 124(5). |
| Application money due for refund | Included where the statutory conditions are satisfied. |
| Matured deposits and debentures | Specified matured amounts may be credited to the Fund. |
| Interest | Interest accrued on specified amounts and income from investments of the Fund are covered. |
| Fractional shares | Sale proceeds arising from bonus issues, merger or amalgamation remaining for seven or more years are covered. |
| Preference shares | Redemption amounts remaining unpaid or unclaimed for seven or more years are covered. |
For the amounts described in clauses (h) to (j) of Section 125(2), the statutory proviso requires the amount to have remained unclaimed and unpaid for seven years from the date it became due before it forms part of the Fund.
How can the IEPF be used?
Section 125(3) authorises use of the Fund for specified investor-protection purposes. These include refunds of eligible unclaimed amounts, investor education and awareness, distribution of disgorged amounts in accordance with court orders, reimbursement of qualifying legal expenses for class actions under Sections 37 and 245 when sanctioned by the Tribunal, and other incidental purposes permitted by the rules.
How can an investor claim money or shares from IEPF?
Section 125(4) permits a person claiming entitlement to an amount covered by Section 125(2) to apply to the IEPF Authority. The detailed refund process is governed by the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, as amended.
The current MCA process uses Form IEPF-5 for claiming eligible unpaid amounts and shares from the Fund. Applicants should follow the current webform instructions, provide the prescribed supporting documents, and complete the company verification process applicable to the claim.
Section 125 - statutory structure
125. Investor Education and Protection Fund.
(1) The Central Government shall establish a Fund to be called the Investor Education and Protection Fund.
(2) The Fund receives the categories of amounts specified in clauses (a) to (n), including Government grants, donations, transfers from Unpaid Dividend Accounts, specified legacy amounts, investment income, certain application money, matured deposits, matured debentures, related interest, qualifying fractional-share sale proceeds, qualifying preference-share redemption amounts and prescribed amounts.
(3) The Fund may be used for statutory refund claims, investor education, awareness and protection, qualifying distributions of disgorged amounts, specified class-action legal expenses and other incidental purposes in accordance with the rules.
(4) A person claiming entitlement to an amount referred to in sub-section (2) may apply to the Authority for payment of the money claimed.
(5) to (7) These provisions establish and support the Authority responsible for administration of the Fund and provide for its composition, administration and resources.
(8) to (11) These provisions govern administration of the Fund, accounts and records, expenditure for statutory objects, CAG audit and the Authority's annual report.
For authoritative wording, amendments and commencement notes, consult the current text of the Companies Act, 2013 on India Code and the notifications/rules issued by the Ministry of Corporate Affairs.