Issue of bonus share for a private limited

Hi Experts,

We have a Private Limited company with Authorised Capital of 50 Lacs and Paid up Capital of 10 Lacs

Share holding patterns is 1,00,00 Shares of Rs 10 each divided equally between the two Promoters.

Each holding 50,000 share of Rs 10 Each.

The reserve ans surplus of the company is Rs 40 Lacs.

Can we issue bonus share of 4:1 and convert the Reserves into Share Capital?

Does it attract Dividend Distribution tax or any other tax?

Please share your views

Thanks in Advance