If you invest in shares, you might receive bonus shares from the company.
These are additional shares given free of cost to existing shareholders.
Although there’s no cash transaction involved, you still need to record this in TallyPrime to maintain accurate stock and investment records.
In this blog post, you’ll learn how to pass a bonus shares entry in TallyPrime in simple steps, along with an easy-to-follow example.
1. What Are Bonus Shares in TallyPrime?
Bonus shares are extra shares issued to shareholders in proportion to their existing holdings.
For example, in a 1:1 bonus, you get 1 bonus share for every 1 share you hold.
There is no monetary cost for bonus shares. The average cost of shares is adjusted accordingly.
2. Example Scenario: Pass Bonus Shares Entry in TallyPrime
Let’s say:
- You own 100 shares of ABC Ltd., purchased at ₹100 each.
- The company announces a 1:1 bonus issue.
- So, you receive 100 bonus shares.
- Total shares = 200
- Total cost = ₹10,000 (only for the original shares)
- Average cost per share after bonus = ₹10,000 / 200 = ₹50 per share
3. Step-by-Step Guide to Record Bonus Shares in TallyPrime
Step 1: Enable Inventory Features
- Go to F11: Features > Inventory Features
- Set Maintain Inventory to Yes
- Set Integrate Accounts with Inventory to Yes (optional)
- Accept the screen
Step 2: Create the Stock Item (if not already created)
- Go to Gateway of Tally > Inventory Info > Stock Items > Create
- Name: ABC Ltd. Shares
- Under: Investments or a custom stock group
- Units: Nos.
- Opening Quantity: 100, Rate: ₹100
This sets up your original shares.
Step 3: Create a Journal Voucher for Bonus Shares
Since bonus shares are received free of cost, we will use a journal voucher to update the quantity only (not value).
- Go to Accounting Vouchers > F7: Journal
- Date: Use the bonus declaration date
- Press Ctrl + V to enable Inventory Allocations
- In the first line:
- Debit: ABC Ltd. Shares (Investment A/c or Stock Item)
- Amount: ₹0
- Quantity: 100 Nos. (Bonus shares received)
- In the second line:
- Credit: Bonus Shares A/c (You can create it under Capital Reserve or General Reserve)
- Amount: ₹0
- Narration: “Being 100 bonus shares received from ABC Ltd. as per 1:1 issue”
Accept the voucher.
4. Optional: Adjust Average Cost of Shares in TallyPrime
TallyPrime automatically adjusts the average cost when you pass a zero-value stock entry. So:
- Original 100 shares @ ₹100 = ₹10,000
- Bonus 100 shares @ ₹0 = ₹0
- New average cost = ₹10,000 / 200 = ₹50 per share
You can verify this in the Stock Summary or Investment Ledger.
5. Reports to Check while Passing Bonus Shares Entry in TallyPrime
- Stock Summary – Shows updated quantity and average cost
- Investment Ledger – Displays transaction history
- Balance Sheet > Investments – Reflects your total value
6. Conclusion
Recording bonus shares in TallyPrime is simple if you follow the right process.
Since there is no money involved, you use a journal entry with zero value but update the stock quantity.
This helps in:
- Maintaining correct number of shares
- Keeping average cost accurate
- Generating reliable reports for capital gains, investment performance, and audit
With TallyPrime, managing your share portfolio—even with corporate actions like bonus issues—is clear and straightforward.
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