Bonus Shares Explained: Record Date, When They Reach Your Demat, and Tax When You Sell

Concord Biotech's 1:1 bonus has a record date of 4 November 2026. Earlier this year, Life Insurance Corporation of India and IRB Infrastructure gave 1:1 bonuses, Trent gave 1:2 and Metropolis Healthcare 3:1. Each time, the same questions come up: when must I buy to qualify, when will the shares show in my demat account, why did the price fall, and how are they taxed when I sell? This guide answers each one from the rules themselves: SEBI's regulations and its master circular, NSE's records, and the Income-tax Act, 2025.

Written on 2 November 2026. The examples use NSE's corporate action list. A bonus issue is neither good nor bad news on its own: it changes the number of shares, not the value of the company. This guide explains the mechanics and the tax. It is not a recommendation to buy or sell any share.

What a bonus issue is, and what it is not

A bonus issue moves money that the company has already kept, its reserves, into share capital, and hands out new shares for free to existing shareholders in a fixed ratio. No cash comes to you and none leaves the company. Because there are now more shares for the same business, each share is worth less, and the value of your holding stays where it was.

SEBI's Issue of Capital and Disclosure Requirements Regulations, 2018 set the conditions for a listed company (Chapter XI, regulations 293 to 295):

• Where the shares come from. Only from free reserves, the securities premium account or the capital redemption reserve, built out of genuine profits or premium collected in cash. Reserves created by revaluing fixed assets cannot be used.
• No defaults. The company must not have defaulted on interest or principal of its fixed deposits or debt securities, or on employees' statutory dues such as provident fund, gratuity and bonus. Partly paid shares must be made fully paid, and no promoter or director may be a fugitive economic offender.
• Not a substitute for dividend. Bonus shares cannot be issued in lieu of dividends.
• Demat only. Bonus shares are allotted only in dematerialised form.
• A deadline, and no going back. The issue must be completed within 15 days of board approval, or within two months where shareholders must approve it, counting the start of trading as completion. A bonus issue, once announced, cannot be withdrawn. SEBI's master circular sets a fine of ₹20,000 a day for a delay.

Reading the ratio

NSE writes a bonus as new shares to shares held. A 1:1 bonus gives one new share for every share you hold; 1:2 gives one for every two; 4:1 gives four for every one. Your new holding is your old holding multiplied by (new + held) ÷ held.

The "price after" is arithmetic, not a forecast. From the ex-date the share trades without the bonus, so its price reflects the larger number of shares; after that it moves with the market and the company's news like any other day.

The dates, day by day

SEBI shortened the bonus timetable with a circular of 16 September 2024, now chapter 14 of its master circular on issue of capital. It applies to every bonus issue announced on or after 1 October 2024. Calling the record date T:

The Concord Biotech dates apply SEBI's timetable to the record date on NSE's list; the company's own notice is final. SEBI also now allows bonus equity shares to be credited straight into the existing ISIN, so they appear in your demat account as the same share, not under a temporary code.

Why the ex-date and the record date are the same day

Indian equities settle on T+1: a share bought today is delivered the next working day. To be a shareholder on the record date, you must therefore buy by the day before, and a buyer on the record date itself gets the share after the cut-off. That is why the exchange marks the record date as the ex-date. NSE's own list bears this out: of 154 bonus actions from January 2024 to October 2026, the ex-date and the record date are the same day in 141. In the other 13, the record date fell on a weekend or a market holiday, and the ex-date is the trading day before:

• Bharat Petroleum's record date was Saturday, 22 June 2024; its ex-date was Friday, 21 June.
• HDFC Bank's 1:1 bonus had a record date of 27 August 2025, a market holiday; the ex-date was 26 August.
• IRB Infrastructure's record date was 1 April 2026; with 31 March a holiday, the ex-date was Monday, 30 March.

Bonus issues on NSE, in numbers

From NSE's corporate action records, counting bonus issues of equity shares:

Almost half, 73 of 151, were 1:1. NSE's list for 2026 also has three bonus issues of redeemable preference shares under schemes of arrangement, at Siyaram Silk Mills and TVS Holdings. Those are a different instrument and are left out of the counts and of this guide.

Bonus or split?

Both leave you with more shares at a lower price and the same total value. The difference is in the books. A bonus capitalises reserves and keeps the face value of each share the same. A split divides each share into smaller ones, cutting the face value, and leaves reserves untouched. The tax rules below are written for bonus shares.

Tax: from allotment to sale

When you receive them

Bonus equity shares are not income when you receive them. The Act's definition of dividend in section 2(40)(b) catches bonus shares only when they are given to preference shareholders, to the extent of accumulated profits. Tax arises only when you sell.

The four rules that decide the tax on a sale

1. Cost. Under section 90(5) and (6), the original shares keep the cost you actually paid, and bonus shares, allotted without payment on the basis of your holding, have a cost of nil.
2. Holding period. Section 2(101) counts the holding period of bonus shares from the date of their allotment, not from when you bought the original shares. A listed share is long-term once held for more than 12 months.
3. Which shares you sold. For shares held in demat form, section 67(7)(c) fixes the cost and holding period first in, first out. If you sell part of a holding, the oldest shares, usually the originals, go first.
4. The rate. On listed shares sold on the exchange with securities transaction tax paid, short-term gains are taxed at 20% (section 196), and long-term gains above ₹1.25 lakh a year at 12.5% (section 198), with 4% cess on top.

For bonus shares allotted before 1 February 2018 and sold as long-term, section 90(7) gives a higher cost: the higher of the actual cost (nil) and the lower of the share's highest price on 31 January 2018 and the sale price. So old bonus shares are not taxed on their full sale value.

A worked example

Asha bought 100 shares at ₹600 on 10 January 2025, for ₹60,000. The company announces a 1:1 bonus with a record date of 4 November 2026; she gets 100 bonus shares, allotted on 5 November 2026, and the price adjusts to about ₹450.

• She sells 100 shares on 1 February 2027 at ₹450. First in, first out, these are her original shares, held for more than 12 months. Sale ₹45,000 minus cost ₹60,000 is a long-term capital loss of ₹15,000. It can be set off only against long-term gains and carried forward for eight tax years if unused (section 111).
• She sells the 100 bonus shares on 1 March 2027 at ₹500. Held for less than 12 months from allotment, at a cost of nil: a short-term gain of ₹50,000, taxed at 20%, ₹10,000, plus 4% cess, ₹10,400.
• If she waits until after 5 November 2027, the same ₹50,000 gain is long-term. Within the ₹1.25 lakh exemption for the year, it would bear no tax.

The bonus-stripping rule (section 175)

The rule exists to stop one trick: buy just before the record date, sell the original shares soon after at the lower ex-bonus price to book a loss, and keep the free shares. Section 175(9) and (10) apply where you:

1. buy shares within three months before the record date;
2. receive bonus shares on them; and
3. sell all or any of the shares you bought within nine months after the record date, while still holding all or any of the bonus shares.

Then the loss on the shares you sold is ignored, and it is treated as the cost of the bonus shares you still hold. The loss is not lost for ever; it moves into the bonus shares and reduces the gain when you sell them.

Example: Ravi buys 100 shares at ₹900 on 15 September 2026, seven weeks before the 4 November record date of a 1:1 bonus. He sells the 100 original shares on 1 February 2027 at ₹450, a loss of ₹45,000, and keeps the 100 bonus shares. The loss is ignored, and the bonus shares now carry a cost of ₹45,000, ₹450 each. If he later sells them at ₹500, his gain is ₹5,000, not ₹50,000.

Before you act on a bonus

• A bonus adds no value by itself. Two shares at half the price are worth what one share was. Judge the company on its business, not on the bonus.
• Get the cut-off right. Buy on or before T−1 to qualify. Selling on the record date keeps your entitlement, because you were on the register.
• Check the credit. The bonus shares should appear on T+1 and become sellable on T+2. If they do not, ask your broker or depository participant first, then the company's registrar.
• Mind the bonus-stripping window if you bought within three months before the record date and plan to sell within nine months after it.
• Keep the dates. The allotment date sets the holding period of the bonus shares, and the purchase date sets it for the originals; your broker's tax statement should show both.

Frequently Asked Questions

When should I buy shares to get the bonus? By the trading day before the record date. Under T+1 settlement the record date is also the ex-date, so shares bought on the record date do not carry the bonus.

When will bonus shares be credited to my demat account? For bonus issues announced on or after 1 October 2024, the deemed date of allotment is the working day after the record date (T+1), and the shares can be traded the following working day (T+2).

Why did the share price fall after the bonus? Because there are more shares for the same company. After a 1:1 bonus, each share is worth about half, but you hold twice as many, so the value of your holding is unchanged.

Is tax payable when I receive bonus shares? No. Tax arises when you sell. Bonus equity shares are not treated as dividend; the definition in section 2(40)(b) covers bonus shares only when they go to preference shareholders.

What is the cost of bonus shares for capital gains? Nil, under section 90(6)(d). The original shares keep the price you paid. For bonus shares allotted before 1 February 2018 and held long-term, the 31 January 2018 price can serve as the cost under section 90(7).

From when is the holding period of bonus shares counted? From the date of allotment of the bonus shares, under section 2(101), not from the date you bought the original shares.

If I sell some shares after a bonus, which ones have I sold? For demat holdings, the first ones you acquired, under the first-in, first-out rule of section 67(7)(c). Usually that means the original shares.

What is bonus stripping? Buying within three months before the record date, then selling those shares within nine months after it while keeping the bonus shares. Section 175 ignores the loss on the shares sold and adds it to the cost of the bonus shares you hold.