Premium - Definition - Law Dictionary Home Dictionary Definition premium

Definition :

Premium, a consideration; something given to invite a loan or a bargain; the consideration paid to the assignor by the assignee of a lease, or to the transferor by the transferee of shares or stock, etc.

Also the name given to the annual or other payment for renewal of a policy of assurance.

When shares are issued for consideration other than cash the value of the assets transferred in excess of the par value of shares issued would be regarded as premium for purpose of our system of law, Income Tax Commissioner (Central Calcutta) v. Standard Vacuum Co., AIR 1966 SC 1393 (1397). [Business Profits Tax Act, 1947, Sch. II, R. 2(1)]