diff --git a/client.js b/client.js
index e260ec9f..5089e57e 100644
--- a/client.js
+++ b/client.js
@@ -1027,6 +1027,7 @@ vorpal.command('transfer', 'transfers tokens to another account').action(async f
     chatId: calculateChatId(to, USER.address),
     memo: answers.memo ? answers.memo : null,
     timestamp: Date.now(),
+    // deductTxFeeFromAmount: true,
     //test: false
   }
   signTransaction(tx)
diff --git a/docs/API.md b/docs/API.md
index 9cce4346..3763f9ee 100644
--- a/docs/API.md
+++ b/docs/API.md
@@ -487,6 +487,7 @@ Transfers tokens between accounts.
   "from": string,    // Source account ID
   "to": string,      // Target account ID
   "amount": bigint,  // Amount to transfer (must be > 0)
+  "deductTxFeeFromAmount": boolean, // Optional, defaults to false. Supported from version 2.4.9.
   "timestamp": number,
   "sign": {
     "owner": string  // Must match 'from' field
@@ -499,15 +500,16 @@ Requirements:
 - Amount must be greater than 0
 - Source account must have sufficient balance to cover:
   - Transfer amount
-  - Transaction fee
-  - Maintenance amount
+  - Transaction fee, unless `deductTxFeeFromAmount` is `true`
+- If `deductTxFeeFromAmount` is `true`, the transfer amount must be greater than the transaction fee
 - Must be signed by the source account
 - Signature must be cryptographically valid
 
 The transaction will:
-1. Deduct amount + fees from source account
-2. Add amount to target account
-3. Update timestamps for both accounts
+1. Deduct amount from source account
+2. Add amount to target account, minus transaction fee when `deductTxFeeFromAmount` is `true`
+3. Deduct transaction fee from source account when `deductTxFeeFromAmount` is false or omitted
+4. Update timestamps for both accounts
 
 #### `email` ⚠️ DEPRECATED
 **Deprecated in version 2.5.0** - This transaction type is deprecated and will be removed in a future version. New transactions of this type will be rejected when network version >= 2.5.0.
diff --git a/src/@types/index.ts b/src/@types/index.ts
index a02d4e95..a19a535d 100644
--- a/src/@types/index.ts
+++ b/src/@types/index.ts
@@ -415,6 +415,7 @@ export namespace Tx {
     }
     chatId: string
     fee?: bigint // Optional fee for the transfer
+    deductTxFeeFromAmount?: boolean // Optional, defaults to false. If true, tx fee is deducted from the transfer amount.
   }
 
   export interface Verify extends BaseLiberdusTx {
diff --git a/src/@types/transactionSchemas.ts b/src/@types/transactionSchemas.ts
index 854456bd..06128b2c 100644
--- a/src/@types/transactionSchemas.ts
+++ b/src/@types/transactionSchemas.ts
@@ -98,6 +98,8 @@ export const schemaTransferTX = {
     amount: { isBigInt: true },
     memo: { type: ['string', 'null'] },
     chatId: { type: 'string' },
+    fee: { isBigInt: true },
+    deductTxFeeFromAmount: { type: 'boolean' },
   },
   required: [...baseTxRequired, 'from', 'to', 'amount', 'chatId'],
   additionalProperties: false,
diff --git a/src/config/index.ts b/src/config/index.ts
index 2a136139..82be7b46 100644
--- a/src/config/index.ts
+++ b/src/config/index.ts
@@ -253,6 +253,7 @@ interface LiberdusFlags {
     weiToLibStringFormat: boolean
     includeTxToKeyInReadTx: boolean
     updateTollRequiredTxInChatHistory: boolean
+    supportDeductTxFeeFromAmount: boolean
   }
 }
 
@@ -298,6 +299,7 @@ export const LiberdusFlags: LiberdusFlags = {
     weiToLibStringFormat: true, // turn on by 2.4.8
     includeTxToKeyInReadTx: true, // turn on by 2.4.8
     updateTollRequiredTxInChatHistory: false, // turn on by 2.4.9
+    supportDeductTxFeeFromAmount: false, // turn on by 2.4.9
   },
 }
 
diff --git a/src/transactions/transfer.ts b/src/transactions/transfer.ts
index c08943cb..adbef39d 100644
--- a/src/transactions/transfer.ts
+++ b/src/transactions/transfer.ts
@@ -37,6 +37,19 @@ export const validate_fields = (tx: Tx.Transfer, response: ShardusTypes.Incoming
     response.reason = `tx "memo" size must be less than ${config.LiberdusFlags.transferMemoLimit} characters.`
     return response
   }
+  if (config.LiberdusFlags.versionFlags.supportDeductTxFeeFromAmount === true) {
+    if (tx.deductTxFeeFromAmount !== undefined && typeof tx.deductTxFeeFromAmount !== 'boolean') {
+      response.reason = 'tx "deductTxFeeFromAmount" field must be a boolean.'
+      return response
+    }
+    if (tx.deductTxFeeFromAmount === true) {
+      const transactionFee = utils.getTransactionFeeWei(AccountsStorage.cachedNetworkAccount)
+      if (tx.amount <= transactionFee) {
+        response.reason = 'transfer amount must be greater than the transaction fee when deductTxFeeFromAmount is true'
+        return response
+      }
+    }
+  }
   if (!tx.sign || !tx.sign.owner || !tx.sign.sig || tx.sign.owner !== tx.from) {
     response.reason = 'not signed by from account'
     return response
@@ -89,10 +102,25 @@ export const validate = (
     return response
   }
 
-  if (from.data.balance < tx.amount + utils.getTransactionFeeWei(AccountsStorage.cachedNetworkAccount)) {
+  const transactionFee = utils.getTransactionFeeWei(AccountsStorage.cachedNetworkAccount)
+  const deductTxFeeFromAmount =
+    config.LiberdusFlags.versionFlags.supportDeductTxFeeFromAmount === true &&
+    tx.deductTxFeeFromAmount === true
+
+  if (deductTxFeeFromAmount === false && from.data.balance < tx.amount + transactionFee) {
     response.reason = "from account doesn't have sufficient balance to cover the transaction"
     return response
   }
+  if (deductTxFeeFromAmount === true) {
+    if (from.data.balance < tx.amount) {
+      response.reason = "from account doesn't have sufficient balance to cover the transfer amount"
+      return response
+    }
+    if (tx.amount <= transactionFee) {
+      response.reason = 'transfer amount must be greater than the transaction fee when deductTxFeeFromAmount is true'
+      return response
+    }
+  }
   // if there is a memo, check if the amount is larger than the Toll required for the chat
   if (config.LiberdusFlags.versionFlags.minTransferAmountCheck) {
     const hasMemo = (tx.memo && tx.memo.length > 0) || (tx.xmemo && tx.xmemo.message && tx.xmemo.message.length > 0)
@@ -160,10 +188,19 @@ export const apply = (
   // update balances
   const transactionFee = utils.getTransactionFeeWei(AccountsStorage.cachedNetworkAccount)
   const maintenanceFee = utils.maintenanceAmount(txTimestamp, from, network)
-  from.data.balance = SafeBigIntMath.subtract(from.data.balance, transactionFee)
+  const deductTxFeeFromAmount =
+    config.LiberdusFlags.versionFlags.supportDeductTxFeeFromAmount === true &&
+    tx.deductTxFeeFromAmount === true
+  if (deductTxFeeFromAmount === false) {
+    from.data.balance = SafeBigIntMath.subtract(from.data.balance, transactionFee)
+  }
   from.data.balance = SafeBigIntMath.subtract(from.data.balance, maintenanceFee)
   from.data.balance = SafeBigIntMath.subtract(from.data.balance, tx.amount)
-  to.data.balance = SafeBigIntMath.add(to.data.balance, tx.amount)
+  let amountReceived = tx.amount
+  if (deductTxFeeFromAmount === true) {
+    amountReceived = SafeBigIntMath.subtract(tx.amount, transactionFee)
+  }
+  to.data.balance = SafeBigIntMath.add(to.data.balance, amountReceived)
 
   // store transfer data in chat
   if (!from.data.chats[tx.to]) {
@@ -184,6 +221,15 @@ export const apply = (
   to.timestamp = txTimestamp
   chat.timestamp = txTimestamp
 
+  const additionalInfo: { amount: bigint; maintenanceFee: bigint } = {
+    amount: tx.amount,
+    maintenanceFee,
+  }
+  if (deductTxFeeFromAmount === true) {
+    // amount reflects the net amount received by the recipient.
+    additionalInfo.amount = amountReceived
+  }
+
   const appReceiptData: AppReceiptData = {
     txId,
     timestamp: txTimestamp,
@@ -192,10 +238,7 @@ export const apply = (
     to: tx.to,
     type: tx.type,
     transactionFee,
-    additionalInfo: {
-      amount: tx.amount,
-      maintenanceFee,
-    },
+    additionalInfo,
   }
   const appReceiptDataHash = crypto.hashObj(appReceiptData)
   dapp.applyResponseAddReceiptData(applyResponse, appReceiptData, appReceiptDataHash)
diff --git a/src/versioning/migrations/2.4.9.ts b/src/versioning/migrations/2.4.9.ts
index 1cda4be1..673b4be9 100644
--- a/src/versioning/migrations/2.4.9.ts
+++ b/src/versioning/migrations/2.4.9.ts
@@ -7,4 +7,5 @@ export const migrate: Migration = async () => {
   nestedCountersInstance.countEvent('migrate', 'calling migrate 2.4.9')
 
   LiberdusFlags.versionFlags.updateTollRequiredTxInChatHistory = true
+  LiberdusFlags.versionFlags.supportDeductTxFeeFromAmount = true
 }