UPSC Prelims 2018— Question 8

**Concept and analysis:** India's 6% equalisation levy on certain payments for online advertising by non-resident e-commerce/advertising entities was introduced through the Finance Act, 2016 as a separate levy and not as a provision incorporated into the Income-tax Act in the manner stated. Tax-credit treatment in a foreign jurisdiction cannot be assumed merely from the existence of a Double Taxation Avoidance Agreement; it depends on the applicable treaty and domestic law. The question is testing precise UPSC-level identification rather than a broad association. The key is to distinguish the exact institutional, constitutional, historical, geographical, economic or scientific feature being asked. **Option-wise evaluation** **Option A:** Incorrect. It selects 1 only, but that combination does not match the verified statement-level assessment; it either includes a false statement or omits a true one. **Option B:** Incorrect. It selects 2 only, but that combination does not match the verified statement-level assessment; it either includes a false statement or omits a true one. **Option C:** Incorrect. It selects Both 1 and 2, but that combination does not match the verified statement-level assessment; it either includes a false statement or omits a true one. **Option D:** Correct. It selects statements 1, 2; these are the statements supported by the relevant constitutional, economic, historical, scientific or geographical facts. **UPSC takeaway:** The safest way to solve this type of question is to anchor the answer in the defining feature of the concept and then test every option against that feature. Closely related institutions or terms are often used as distractors. In statement-based questions, do not judge the option as a whole before checking each statement independently. In factual questions, compare the wording of each option with the exact definition, location, institutional role, chronology or scientific property. The correct answer follows from that verification rather than from familiarity with a keyword.