GyanGramWith reference to India's decision to levy an equalization tax of 6% on online advertisement services offered…
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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".
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• Correct Answer: A
• The 6% equalization levy on online advertisement services was introduced by the Finance Act, 2016, not the Income Tax Act, 1961.
• It is outside the scope of India's DTAAs, so non-resident entities cannot claim tax credit in their home country.
• Both statements are incorrect.
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