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