What is Bonus Share?

Bonus shares are additional shares which are gifted to its shareholders. Simple! If you are an existing shareholder of any company (as per the record date) then it might happen that the company may gift you some extra shares.  You get these additional shares without paying anything, hence are known as bonus shares.  Bonus shares are issued in the form like 1:1- means 1 extra shares for 1 holding shares or 1:2- means 1 extra shares for 2 holding shares etc.