EXHIBIT (d)(3)

FEE REDUCTION AGREEMENT

AGREEMENT made as of this 27^th day of March 2006, between Boston Income Portfolio (the “Trust”) and Boston Management and Research (the “Adviser”).

WHEREAS, the Trust has entered into an Investment Advisory Agreement (“Advisory Agreement”) with the Adviser, which Advisory Agreement provides that the Adviser shall be entitled to receive an asset-based fee payable at a certain rate; and

WHEREAS, the Adviser has offered to reduce such advisory fee rate, and the Trust has accepted such fee reduction, such fee reduction being effective as of March 27th, 2006; and

WHEREAS, the Adviser and the Trust wish to memorialize said fee reduction in writing;

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein and for other good and valuable consideration, receipt of which is hereby acknowledged, the Trust and the Adviser hereby agree as follows:

1.	For so long as the Advisory Agreement shall remain in effect, notwithstanding any provisions of the Advisory Agreement to the contrary, the Adviser will reduce its advisory fee for the Trust in accordance with the fee reduction schedule set forth on Exhibit A hereto.
2.	This Agreement may only be terminated or amended upon the mutual written consent of the Trust and the Adviser; provided, however, that (i) no termination of this Agreement shall be effective unless approved by the majority vote of those Trustees of the Trust who are not interested persons of the Adviser or the Trust (the “Independent Trustees”) and by the vote of a majority of the outstanding voting securities of the Trust; (ii) no amendment of this Agreement shall be effective unless approved by the majority vote of the Independent Trustees; and (iii) no amendment of this Agreement that decreases the fee reductions set forth herein shall be effective unless approved by the vote of a majority of the outstanding voting securities of the Trust.
3.	For purposes of this Agreement the term “vote of a majority of the outstanding voting securities of the Trust” shall mean the vote, at a meeting of Holders, of the lesser of (i) 67 per centum or more of the Interests in the Trust present or represented by proxy at the meeting if the Holders of more than 50 per centum of the outstanding Interests in the Trust are present or represented by proxy at the meeting, or (ii) more than 50 per centum of the outstanding Interests in the Trust.
	The terms “Holders” and “Interests” when used herein shall have the respective meanings specified in the Declaration of Trust of the Trust.
4.	This instrument is executed under seal and shall be governed by Massachusetts law.

017_0122

     IN WITNESS WHEREOF, this Agreement has been executed as of the date set forth above by a duly authorized officer of each party.

BOSTON INCOME PORTFOLIO
By:	/s/ Michael W. Weilheimer
	Michael W. Weilheimer
	President

BOSTON MANAGEMENT AND RESEARCH
By:	/s/ Alan R. Dynner___________
	Alan R. Dynner
	Vice President

017_0122

Exhibit A

ADVISORY FEE REDUCTION SCHEDULE
Boston Income Portfolio
(Effective as of March 27, 2006)

On net assets of $2 billion and over, the Adviser’s asset-based advisory fee is reduced and computed as follows:

Average Daily Net Assets for the Month	Annual Fee Rate  (for each level)
$2 billion but less than $5 billion	0.5750%
$5 billion and over	0.5550%

017_0122