03 October 2021
Auditing refers to the evaluation of business books of accounts & vouchers. It is done to make sure whether all the financial transactions are accurately recorded. Auditing aims at finding out the errors from books of accounts of the business. Tax audit is one which verifies the authenticity of tax returns filed by the company. These audits are conducted by designated tax authority or government tax department. Tax auditors checks for any discrepancies in tax liabilities of business for ensuring that there is no underpay or overpay of tax amount towards the tax authorities. It evaluates for any possible errors on tax return of business. Under Income tax act, tax audit liabilities arises, if the turnover of the business is Rs. 1 Cr or more; while that of profession is Rs. 50 lakhs or more.
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