To regulate dividend stripping to some extent, Section 94(7) of the Income Tax Act proposes the following provisions: An investor who claims short-term capital losses through the sale of shares should have acquired or bought the units within three months prior to the record date. Such an individual should transfer or sell his/her shares within three months after the record date. An individual should transfer or sell his/her mutual fund units within nine months after the record date.  An income or dividend from the transfer or sale of those units will be tax-exempt.