Used to emphasize how strongly the speaker disagrees with the previous statement or belief. Some say he's not a hard worker, but nothing could be further from the truth.
Pro Tip 2/3
Correcting Misconceptions
Use it to correct someone's false ideas or assumptions in a strong manner. People assume I'm not qualified, yet nothing could be further from the truth.
Pro Tip 3/3
Strong Denial
It is a way to strongly deny something and assert that the opposite is true. He's accused of being lazy, but nothing could be further from the truth.