I was asked does Buddhism have a theory of truth and, if so, what is it? The quick answer is yes, it does, and Buddha knows.
Let's unpack this. Buddhism does teach that there is truth (tatva, tatha). This means that Buddhism is not a pure relativism. It does not say that each person's truth is entirely their own affair. It is possible to be wrong or mistaken and this has consequences. Being wrong about the truth is delusion or ignorance (avidya) and this is the root of all human folly. Buddhism teaches that we are all deluded in varying degrees. Buddhas are not deluded in relation to spiritual truth or ultimate truth, even though they might be deceived or ignorant in practical matters. Shakyamuni did not know how a telephone worked because they did not have them in his time, but this is not a knowledge that has relevance to the spiritual path. A Buddhist teacher should have insight into spiritual and absolute truth.
Introducing these terms shows us that the Buddhist theory of truth has levels. There is a two level theory deliniating relative truth and absolute truth and a three level theory in which there are two degrees of relative truth – mundane and spiritual. Corresponding to these levels are bodies (kaya) of Buddha.
Then, cutting across these classifications there is the question of being (asti) and emptiness (shunyata). Here there is controversy which could be taken to be purely linguistic but which does lead to a different framework for understanding. From one point of view, all is illusion, empty of substantial existence. Related to this is the idea that only the present moment exists and even that is evanescent. From the other point of view, everything exists, including the past, present and future, but these existances are contingent, which is to say, not fixed. Both perspectives agree that everything (whether real or merely apparent) depends on conditions.