What is tax audit? What is the limit?

Question

Accepted Answer

Tax audit is a process conducted by tax authorities to verify the accuracy of a taxpayer's financial records and compliance with tax laws.

Tax audit is conducted by tax authorities to ensure taxpayers are accurately reporting their income and paying the correct amount of taxes.
It involves a thorough examination of a taxpayer's financial records, including income, expenses, deductions, and credits.
The purpose of a tax audit is to identify any discrepancies or errors in the taxpayer's records and determine if additional taxes are owed.
The limit for tax audit varies by country and can depend on factors such as the taxpayer's income level and the type of business they operate.
For example, in the United States, the Internal Revenue Service (IRS) generally has three years from the date a tax return is filed to conduct an audit.
However, if a taxpayer has significantly underreported income or committed fraud, there is no time limit for the IRS to initiate an audit.

Accepted Answer

Turnover during Previous year more than 1 crore rupees.

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