Tax audit is an examination/review of accounts of the business /profession from income tax viewpoint such as income, deductions, compliance with income tax law etc.
Tax audit is being conducted to achieve the following:
1) Ensure proper maintenance and correctness of books of accounts and certification of the same by tax auditor
2) Reporting of observations/discrepancies noted by tax auditor after a methodical examination of books of account
3) Reporting prescribed information such as tax depreciation, compliance of various provisions of income tax law etc. This in turn enables and also saves time of tax authorities in verifying the correctness of income tax return filed by the taxpayer such as total income, claim for deductions etc.