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 :

It is introduced as a part of the Income Tax Act.

• This statement is incorrect. The equalization levy was introduced in Budget 2016 as a separate, standalone chapter in the Finance Act, not as part of the Income Tax Act.

Non-resident entities that offer advertisement services in India can claim a tax credit in their home country under the “Double Taxation Avoidance Agreements”.

• This statement is also incorrect. The equalization levy is not covered under Double Taxation Avoidance Agreements that India has with other countries. Therefore, foreign companies cannot claim a tax credit for this levy in their home country.