With reference to India's decision to levy an equalization tax of 6% on online advertisement services offered by non-resident entities, which of the following statements is/are correct?1.It is introduced as a part of the Income Tax Act.2.Non-resident entities that offer advertisement services in India can claim a tax credit in their home country under the "Double Taxation Avoidance Agreements".Select the correct answer using the code given below:

1. A

   1 only

   (a) 1 only. The 6 percent equalisation levy on specified online advertisement services was introduced by the Finance Act, 2016 as a separate levy, not as a chapter of the Income-tax Act, 1961. Statement 1 is therefore false and cannot be the key.

2. B

   2 only

   (b) 2 only. Because the levy is not income-tax, non-resident platforms generally cannot claim DTAA foreign-tax credit for it in the home country. Statement 2 is false, so this letter is not the key.

3. C

   Both 1 and 2

   (c) Both 1 and 2. Both statements fail, so both-correct is not the key.

4. D

   Neither 1 nor 2

   (d) Neither 1 nor 2. (d) Official key: Equalisation levy sat outside the Income-tax Act, and DTAA credit is not available in the ordinary way. Neither statement is correct, which matches the stored key.

Summary. Official key is (d) neither 1 nor 2. The 6 percent equalisation levy on online ads was a Finance Act levy, not an Income-tax Act provision. It is not income-tax, so Double Taxation Avoidance Agreements do not ordinarily give a home-country credit. Honour the stored letter (d).