Clause 10

by deleting paragraph (b) of subsection (2) thereof and substituting therefor the following: —“(b)may provide for exemption, wholly or partly and with or without conditions, from tax in either or both countries and for any income so exempted to be taken into account in determining the effective rate of tax to be applicable to other income;”; and

by inserting immediately after subsection (2) thereof the following subsection: —“(2A) In paragraph (b) of subsection (2) of this section, “effective rate of tax” means the rate of tax as ascertained in accordance with the formula where Ais the tax payable before allowance of credit under any arrangements having effect under this section on B + C computed in accordance with the provisions of this Act;Bis the exempt income; andCis the other income.”.