The quick difference
Both increase your share count and lower the price per share, with your total value unchanged. But bonus shares are issued free from the company’s reserves, while a stock split just divides each existing share into more — the face value falls in a split but not in a bonus.
Bonus shares
A 1:1 bonus gives you one extra share for each you hold, doubling your count; the price roughly halves. The company capitalises its reserves — face value stays the same (e.g. ₹10).
Stock split
A 1:5 split turns one ₹10 face-value share into five ₹2 face-value shares; the price divides by five. It’s purely cosmetic — it makes a high-priced share more affordable and liquid.
Does it create value?
Neither adds value by itself — your total holding value is unchanged. They can improve liquidity and signal management confidence, but the business fundamentals are what matter.
Frequently asked questions
What is the difference between a bonus and a split?
A bonus issues free shares from reserves (face value unchanged); a split divides each share into more (face value falls). Both raise your share count and lower the price proportionally.
Do bonus shares or splits make me richer?
No — your total holding value is unchanged. You own more shares at a lower price. They can improve liquidity, but don’t create value on their own.
Are bonus shares taxable?
Receiving bonus shares isn’t taxed; capital gains apply when you sell, with the bonus shares’ cost generally taken as zero.