Light-Duty Electric Vehicle (LDEV) with a distributed drive powertrain provides several potential advantages in terms of flexibility, controllability and responsiveness over conventional powertrains. The precise distribution of driving and braking torque of such configuration is crucially vital for improving the overall performance and efficiency of the vehicles. This paper proposes a new torque allocation (TA) model emphasizing the wheel load variation due to the passenger occupancy payload. A light-duty vehicle model is developed along with the occupancy payload arrangement and a dynamic tire-road friction estimation method for the control system for wheel slip. This proposed TA algorithm uses offline optimization to derive the necessary transmissible torque to the driving wheels. Unlike conventional optimization, it adopts a set of predefined distribution coefficients. Therefore it can execute in a real time platform without high computation power and additional hardware requirements. The efficiency of the model is analyzed using Indian Urban Drive Cycle (IN-UDC). A comparative analysis using a traditional torque allocation model highlights the contributions of this novel torque allocation. The results obtained from various simulations demonstrate the effectiveness of the proposed new TA algorithm.