Taxable head

This query is : Resolved

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)
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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

Asha Kanta Sharma online

Asha Kanta Sharma online

(Expert)
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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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