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Audits

There are various kinds of audit being conducted under different laws such as company audit/statutory audit conducted under company law provisions, cost audit, stock audit etc. Similarly, income tax law also mandates an audit called ‘Tax Audit’. As the name itself suggests, tax audit is an examination or review of accounts of any business or profession carried out by taxpayers from an income tax viewpoint. It makes the process of income computation for filing of return of income easier.

Objectives of tax audit

Tax audit is  conducted to achieve the following objectives:

  • Ensure proper maintenance and correctness of books of accounts and certification of the same by a tax auditor
  • Reporting observations/discrepancies noted by tax auditor after a methodical examination of the books of account
  • To report prescribed information such as tax depreciation, compliance of various provisions of income tax law etc. All these enable tax authorities in verifying the correctness of income tax returns filed by the taxpayer. Calculation and verification of total income, claim for deductions etc. also becomes easier.

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