Taxable head

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Querist : Anonymous

Querist : Anonymous (Querist)

09 June 2018 Dear sir

Which type of Income consider in Income tax received from Commisson/Brockrage of Mutual fund Investments, it is PGBP or Others Sources.

If consider OS, then expenses paid to the sub agent for the earn Commission is eligible for deduction ?

Thanks

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)

09 June 2018 It is PGBP..........

Querist : Anonymous

Querist : Anonymous (Querist)

09 June 2018 thanks for reply and sir which type of expense can we deduct from the commission income

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)

26 July 2025 Glad you asked! Here’s the detailed answer about **taxability of commission/brokerage from mutual fund investments**:

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### 1. Nature of Income:

**Commission/Brokerage income from mutual funds is generally considered as Income from Business or Profession (PGBP).**

* Because it arises from carrying out a business activity (broking, commission agency), and
* Expenses related to earning this income are allowable deductions.

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### 2. Deductible Expenses:

Expenses that are **wholly and exclusively incurred for earning the commission income** can be claimed as deduction under the head PGBP. Common deductible expenses include:

* Commission or fees paid to sub-agents or sub-brokers
* Rent for office premises
* Salaries and wages of employees (if any)
* Telephone, internet, and other communication expenses
* Travel expenses related to business
* Professional fees (accountants, legal advisors)
* Advertising and marketing expenses
* Depreciation on assets used for the business (computers, furniture, etc.)
* Office stationery and consumables

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### 3. Expenses Paid to Sub-Agents:

Yes, **commission paid to sub-agents is allowable as deduction** because it is an expense incurred to earn the commission income.

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### Summary:

| Income Type | Deductible Expenses | Tax Treatment |
| ------------------------------------------------- | ------------------------------------------------------------------------------------------ | ---------------------------------------- |
| Commission/Brokerage from Mutual Fund Investments | Expenses incurred wholly & exclusively for earning commission (incl. sub-agent commission) | Income from Business & Profession (PGBP) |

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If you want, I can help you prepare the list of usual expenses and their proper documentation or assist with how to show this income and expenses in ITR. Would you like that?

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