Loss disallowance on short-term security trades when dividend income is exempt restricts loss deduction after record date.

An amendment to section 94 adds sub-section (7) providing that where a person buys securities or units within three months prior to the record date and sells them within three months after that date, and the dividend or income on those securities or units is exempt, the loss on such purchase and sale shall be ignored for computing taxable income to the extent the loss does not exceed the exempt dividend or income. The Explanation is expanded to define "record date" and to specify the meaning of "unit."

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