The correct answer is option 4, "Neither 1 nor 2".

An analysis of the options given:

Option 1 states that the equalization tax was introduced as a part of the Income Tax Act. This is not correct. The equalization levy, introduced in 2016, is a distinct tax and is not a part of the Income Tax Act. It is governed by the Equalization Levy Rules, 2016.

Option 2 suggests that non-resident entities providing advertisement services in India can claim a tax credit in their home country under Double Taxation Avoidance Agreements (DTAA). This is also untrue. The equalization tax does not come under the scope of the DTAA. Hence, non-resident entities cannot claim tax credit in their home country for the equalization tax paid in India.

Therefore, both statements are false, and the correct answer is option 4, "Neither 1 nor 2".