Premium on Securities

Tax Glossary Definition

Premium on Securities

Premium on securities refers to the amount paid by an investor above the face (nominal) value of a security, such as shares or debentures. This premium forms part of the cost of acquisition and is considered while computing capital gains or losses at the time of sale.

Example: A share purchased at ₹120 with a face value of ₹100 includes a premium of ₹20.

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