Tax Audit means an examination of the Income Tax Return filed by the company for the assessment year and inspecting the information mentioned in the ITR is true or not. A company is liable to perform a tax audit when it becomes liable under the corporate laws in India and cross a certain threshold. Section 44AB of the Income Tax Act, 1961, lays down the provisions for an income tax audit of businesses in India. An external agency is to be appointed to assess the ITR Return filed by the company for the financial year and submitting the different tax audit forms with the tax authority. Form 3CA or Form 3CB, and Form 3CD are filed as the tax audit report of a company every year. Purpose Of Tax Audit A tax audit of a company’s Income Tax Returns must be performed for the following reasons: It is an evaluation of the accuracy of the ITR filed by the company or an individual. It reports the accuracies, errors or irregularities in the tax return filed by a taxpayer. It reports the informatio