"World Trade Organization(WTO)"

                       The World Trade Organization (WTO) is an organization that intends to supervise and liberalize international trade. The organization officially commenced on 1 January 1995 under the Marrakech Agreement, replacing the General Agreement on Tariffs and Trade (GATT), which commenced in 1948. The organization deals with regulation of trade between participating countries; it provides a framework for negotiating and formalizing trade agreements, and a dispute resolution process aimed at enforcing participants' adherence to WTO agreements, which are signed by representatives of member governments:fol.9–10 and ratified by their parliaments. Most of the issues that the WTO focuses on derive from previous trade negotiations, especially from the Uruguay Round (1986–1994).

                           The organization is attempting to complete negotiations on the Doha Development Round, which was launched in 2001 with an explicit focus on addressing the needs of developing countries. As of June 2012, the future of the Doha Round remains uncertain: the work programmed lists 21 subjects in which the original deadline of 1 January 2005 was missed, and the round is still incomplete. The conflict between free trade on industrial goods and services but retention of protectionism on farm subsidies to domestic agricultural sector (requested by developed countries) and the substantiation of the international liberalization of fair trade on agricultural products (requested by developing countries) remain the major obstacles. These points of contention have hindered any progress to launch new WTO negotiations beyond the Doha Development Round. As a result of this impasse, there has been an increasing number of bilateral free trade agreements signed.  As of July 2012, there are various negotiation groups in the WTO system for the current agricultural trade negotiation which is in the condition of stalemate.

                         WTO's current Director-General is Roberto Azevêdo, who leads a staff of over 600 people in Geneva, Switzerland.

                               The WTO's predecessor, the General Agreement on Tariffs and Trade (GATT), was established after World War II in the wake of other new multilateral institutions dedicated to international economic cooperation – notably the Bretton Woods institutions known as the World Bank and the International Monetary Fund. A comparable international institution for trade, named the International Trade Organization was successfully negotiated. The ITO was to be a United Nations specialized agency and would address not only trade barriers but other issues indirectly related to trade, including employment, investment, restrictive business practices, and commodity agreements. But the ITO treaty was not approved by the U.S. and a few other signatories and never went into effect.

                         In the absence of an international organization for trade, the GATT would over the years "transform itself" into a de facto international organization.

"COMPUTATION OF INCOME"

                 Let us take a quick survey of the steps involved fin the assessment (computation) of income under the Act.

1)   Determine Scope of Total Income :-      

                                          The "scope" of income means - What items are to be included in the income, and what items are to be excluded. The scope of income depends upon three factors - (a)  whether the  person earning the income is resident in India or not, (b)  whether the income arises during the previous 

     year and   (c) whether the income arises in India or outside. 

          

            (a)  Residence :  What items are to be included in the income depends upon whether a person is a  "resident"in India or not. A person is said to be "resident" in India, if, broadly speaking, he has stayed in India for the major part of the previous year (i.e. 6 moths or more); otherwise he is called a "non-resident".

            (b)  Year :  The income to be taxed must have arisen during the previous year only, i.e. neither before nor after the previous year.

             (c)  Place :  What items are to be included in the taxabbles income of a person, depends, next, upon whether the income is Incian of Foreign, i.e. arising within or outside India. Broadly speaking, a Resident has to pay Income-tax only on Indian as well as Foreign income, while a Non-Resident is liable to pay Income-tax only on the Indian income.

                 

2)   Classify Income Under Different Heads :-     

                                            After determining what is to be included, the next step is to classify the income under different "heads of income" prescribed under the Act. The major heads of income are - Salary,  Income from Property, Profits from Business, Capital Gains, and Income from Other Sources.

      

3)   Compute Income Under Each Head :- 

                                            The rules for computing income under each head are different. Such rules prescribe as to what is to be included under each head, what are the deductions allowed under each head and so on. This is the most important step in the computation of income. The Act grants exemption from tax, on certain items of income, such as agricultural income, or Leave Travel Allowance; or to certain persons such as Foreign Technicians, Foreign Teachers etc. Such exempted items are to be totally ignored and excluded while computing the taxable income.

4)   Determine Gross Total Income :-

                                           Though income is classified and computed under different heads, in the end, the income under all the heads is added together to arrive at the "Gross Total Income" of the assesses.

5)   Deduct Claims For Deductions :-

                                           The Income-tax Act allows certain deductions from the Gross Total Income.Such deductions are given to encourage savings in National Savings Certificates, PPF, etc. Deductions are also given on income earned by a handicapped person etc.           

6)   Compute Net Taxable Income :-

                                           Net Taxable Income is equal to Gross Total Income Less Deductions Allowed.This is the final step in the computation of income. Income-tax is charged on such bet taxable income.