1. Safeguard maintenance and correctness of books of accounts

2. Detailed analysis of observation made by the auditor of books of accounts

3. To Checks any frauds and malpractices if used while filing the case.

4. Make a report of complete observations.

The provisions related to tax audit are provided under section 44AB in the Income Tax Act 1961. This section throws light on the rules to maintain books of accounts and other financial records by the taxpayer properly. This section also helps in maintaining complete information regarding tax, income, and deductions of the taxpayer. The reason behind getting a tax audit done is to check the accuracy of the information given by the assessee regarding his income and the amount of tax filed. This section helps in the reduction of fraud practices. The audit report is reported to income tax department along with the income tax return by a practicing Chartered Accountant or relevant authority. Thus, it can be said that every person who earns income by any business or profession must maintain his books of accounts and get a tax audit done except those who have opted for presumptive taxation. The taxpayers need to get a tax audit done if the turnover, sales, gross receipts of business exceed Rs 1 crore in the financial year. A person carrying on profession if his gross receipts in profession for the year exceed Rs. 50 lakhs.

Persons like company or co-operative society are required to get their accounts audited under their respective law. S​ection 44AB provides that, if a person is required by or under any other law to get his accounts audited, then he need not again get his accounts audited to comply with the requirement of section 44AB. Is such a case, it shall be sufficient if such person gets the accounts of such business or profession audited under such law and obtains the report of the audit as required under such other law and a report by the chartered accountant in the form prescribed under section 44AB

A person covered by section 44AB should get his accounts audited and should obtain the audit report on or before 30th September of the relevant assessment year, e.g., Tax audit report for the financial year 2020-21 corresponding to the assessment year 2021-22 should be obtained on or before 30th September 2021. According to section 271B, if any person who is required to comply with section 44AB fails to get his accounts audited in respect of any year or years as required under section 44AB or furnish such report as required under section 44AB​, the Assessing Officer may impose a penalty. The penalty shall be lower of the following amounts:

(a) 0.5% of the total sales, turnover, or gross receipts in business, or of the gross receipts in profession, in such year or years.

(b) Rs. 1,50,000.