Digital Signature for E-Filing Your Income Tax Return

Technological advancements have made the whole process of tax filing and submitting returns over the internet much simpler. In order to e-file income tax returns, taxpayers need to affix their digital signature onto their tax return document as a way to authenticate it. Under the IT Act 2000, a digital signature enjoys the same status as a regular signature. It attests and verifies that the taxpayer has authenticated the tax return documents in a safe environment, without fraud.

Digital signatures, which are issued by Certification Authorities, contain particulars like the taxpayer's name, public key, name of issuing Certification Authority, expiration date of public key, the digital signature and its serial number. Tampering with digitally signed documents and claiming forgery over digital signatures are not possible, considering that a number of checks are in place to substantiate the same. Documents that are digitally signed are protected from further modifications and additions post signing.

Benefits of Digital Signature

Following are some of the benefits of using digital signature:

A digital signature cannot be edited or tampered with.
It is easier to track a digitally signed document.
Brings down wastage of paper and is an environment-friendly option.
Helps streamline the efficiency of the entire e-filing process.
Reduces cost and adds to convenience.

Components of Digital Signature

For the purpose of knowing how a digital signature functions, one needs to first understand the elements involved in a digital signature:

Name: The primary and utmost important thing that a digital signature holds is the name of the person who would be using it or authorizing a document by its use for a variety of purposes like filing documents with relevant authorities. A digital signature also reduces chances of a fraud getting commitment under his name by another person bearing the same name.
Personal Information: Along with the full name, a digital signature also has vital and other relevant information like contact number i.e. mobile number, residential and office telephone numbers, email address, residential address, office address which may be used to locate and contact the person. This information is in an encrypted form and cannot be accessed by everybody, thus it also ensures privacy of the user.
Public Key: Every digital signature has a special public key associated with it. This key is used for encrypting and securing a document at the time it is being authorised. It plays a very important role in the verification process. There is also an expiry date for each and every digital signature, which is determined by the public key associated with it. The public key shows the time frame during which a digital signature is valid. The key also helps to reset the digital signature, if the need arises.
Serial Number: This is another key component that works as a unique identifier for a digital signature. This number is of prime importance to ensure the viability of a digital signature. The serial number is used by the certification authority who issues the digital certificate.

Where can you Use Digital Signatures

Digital signatures can be used in the following cases:

For receiving and sending digitally signed emails.
For conducting secure online transactions.
For e-filing income tax returns.
For signing documents such as MS Excel, MS Word and PDFs.

How to Register Digital Signature While E-Filing Income Tax Return

Step 1: For filing tax returns using digital signature, the taxpayer needs to first register it on the Income Tax Department's e-filing portal - www.incometaxindiaefiling.gov.in
Step 2: On the e-filing website, the taxpayer needs to log in to his or her registered account using their user id and password.
Step 3: After logging in, select the button that says “My Account” and click on “Update Digital Certificate” option.
Step 4: A download of a file called “Store Certificate” should start automatically. A local copy of the digital signature will be saved on the computer system.
Step 5: Go back to the web page and click on “Upload your USB Token” and you will be redirected to a page with a button that says “Select Your USB Token Certificate” and “Browse”. On clicking the “Browse” button, a selection window will open where you need to choose the file you just downloaded.
Step 6: Select the file and click on “Okay”. Enter the PIN code, which is the Token Password, and then click on “Sign”.

Certifying Authorities for Digital Signature Certificates

The following are the licensed certifying authorities who have been authorized by government-appointed Controller of Certifying Authority:

Safescrypt
CDAC CA
Capricorn CA
IDRBT
GNFC
e Mudhra CA
NSDL e-Gov CA
Indian Air Force
Verasys CA

How to Get a Digital Signature

For the purpose of obtaining a digital certificate, the entity will have to submit certain documents to the certifying authority. These can include an application form that has been duly signed, a passport size photo and identification proof, among others. The applicant may be asked to provide his or her mobile number, email address and home or organization address. An essential point to be noted is that different countries will have different requirements from the applicants for the issuance of digital signature certificate.

Procedure for Uploading Income Tax Return Online Using Digital Signature

Step 1: Fill out the ITR form, generate the file as an XML file and save it.
Step 2: Visit the Income Tax India website. Log in to your registered account using your user ID and password.
Step 3: After logging in, click on the tab that reads “Submit Return” and then select the Assessment Year.
Step 4: Select the ITR Form Name from the drop-down menu.
Step 5: The next field will ask “Do You Want To Digitally Sign The File?” Select the “Yes” button.
Step 6: Select the kind of digital signature you want to use, it can be “Sign With .PFX file” or “Sign With USB Token”.
Step 7: Upload the income tax returns with the help of digital signature certificate and authenticate it.

E-Filing through Digital Signature Certificate mandatory for certain taxpayers:

Type of taxpayer	Condition	Manner of furnishing return of income
Individual or HUF	Accounts need to be audited under Section 44AB of the Income Tax Act	Electronically under digital signature
Company	In all cases	Electronically under digital signature
A person required to furnish the return in Form ITR-7	In case of a political party	Electronically under digital signature
Firm or LLP or any person (other than a person mentioned in Sl. 1 to 3 above) who is required to file return in Form ITR-5	Accounts need to be audited under Section 44AB of the Income Tax Act	Electronically under digital signature

Registering Digital Signature (DSC) on GST Portal

In case of GST registration, public limited companies, unlimited companies, public sector undertakings, foreign companies, limited liability partnerships and foreign limited liability partnerships are required to obtain digital signature certificate. For other taxpayers, using digital signature is optional.

The GST portal only accepts PAN based Class 2 or 3 certificates from the following certifying authorities:

Tata Consultancy Services (TCS)
National Informatics Center (NIC)
IDRBT Certifying Authority
SafeScrypt CA Services, Sify Communications Ltd.
Code Solutions CA
MTNL
E-MUDHRA
Customs & Central Exercise

Steps to Follow For New Registration Of Digital Signature Certificate On The GST Portal

Step 1: Go to www.gst.gov.in
Step 2: Click on the link that reads “Register Now”.
Step 3: Select the TRN (Temporary Reference Number) and enter the TRN you receive.
Step 4: Click on the “Proceed” option.
Step 5: Enter the OTP sent to your email address and mobile number in the email OTP field and mobile OTP field, respectively. Click on the “Proceed” option after you are done.
Step 6: Choose the option that says “Services” and select “User Services” from the drop-down menu. Finally select “Register/Update DSC” command.

Steps To Follow For Existing Registrations Of Digital Signature Certificate On The GST Portal

Step 1: Log in to the GST Portal and click on the “My Profile” link.
Step 2: Select the “Register/Update DSC” link.
Step 3: It will redirect you to the Register Digital Signature Certificate page. Select the drop-down list that reads “PAN of Authorized Signatory”. Choose the PAN of the authorized signatory you want registered.
Step 4: Click on “I Have Downloaded And Installed The Signer” checkbox and then press the “Proceed” button.
Step 5: Choose the certificate and select the “Sign” button.

A message that reads “Your DSC Has Been Successfully Registered” will appear.

Steps To Update Digital Signature Certificate With The GST Portal

Step 1: Go to www.gst.gov.in and log in the portal with the registered user ID and password.
Step 2: Click on the “My Profile “link.
Step 3: Select the “Register/Update DSC” link.
Step 4: You will be redirected to the register digital signature certificate page. Select the drop-down list that reads “PAN of Authorized Signatory”. Select the PAN of the authorized signatory that you want updated.
Step 5: Click on the “Update” button and then the “Continue” option
Step 6: Choose the certificate and press the “Sign” button.

A message saying “DSC Has Been Successfully Updated” will be displayed.

Points To Be Noted About Digital Signature Certificate

Digital signatures are issued for a year or two. They need to be renewed once their validity expires.
A person can have different digital signature certificates – one for official purposes and another for personal reasons.
Documents containing digital signatures can be used in the court of law as an evidence or proof.

FAQs

What are the various classes of DSCs?

There are three different kinds of digital signature certificates:

Class 1 Certificate: These are issued to individuals or private subscribers. Class 1 Certificate confirms that the user’s name and e-mail ID are authentic and approved by the Certifying Authorities on their database.
Class 2 Certificate: These are issued to business personnel and individuals. They confirm that the information in the application provided by the subscriber is the same as the information in popular consumer databases.
Class 3 Certificate: These are issued to individuals and organizations. They are high assurance certificates, mainly for the purpose of e-commerce applications. It is only issued when the individual appears in-person before the certifying authorities.

What does a digital signature comprise of?

Digital signatures comprise of:

Owner’s name.
Owner’s public key
Expiration date of the Owner’s public key.
Issuing Certification Authority's name
Serial Number (digital signature)
Digital signature

What are the benefits of using digital signatures?

Through the use of digital signatures, taxpayers do not have to spend time or effort printing the physical copies of documents, signing them and mailing it across. All that the individual has to do is insert the digital signature and click on the button to proceed or email the same. Another advantage of using digital signatures is that documents cannot be altered or edited after signing, thus ensuring that the data is secure.

How long is a digital signature certificate valid?

The licensed Certifying Authorities issue digital signature certificate with a validity of one or two years.

Who are the licensed Certifying Authorities that can issue the digital signature?

The following organizations are authorized Certifying Authorities:

CDAC CA
Safescrypt
Capricorn CA
IDRBT
GNFC
e Mudhra CA
NSDL e-Gov CA
Indian Air Force
Verasys CA

Who can use digital signature certificate?

The below table contains the constitution and the individual(s) from the constitution who can sign using digital signature certificate:

Establishment	Proprietor
Hindu Undivided Family	Karta
Partnership	Managing Partner
Trust Registration	Managing Trustee
LLP/Company	Authorized signatories with due authorization from the LLP/board of the company
Society, club	Authorized signatories with due authorization from management committee
Statutory Body	Authorized signatories
Local Authority	Authorized signatories
Government Department	Authorized signatories

Can digital signature be misused?

It’s very unlikely that digital signature will be misused, especially if used on the right platform.

How is a digital signature created?

A digital signature is created following a complex mathematical process which is run by the computer.

How can I create digital signature in e-filing?

To register the digital signature certificate on the E-filing website, you would first need to login to the Income Tax Department’s e-Filing website. Once you’re there, click on the Register Digital Signature Certificate option and follow the instructions.

How can I get digital signature?

To get a digital signature, fill up the application form, attach the required documents and submit them to the certifying authority.

How can we use digital signature?

Digital signatures can be used in the following cases:

For conducting secure online transactions
For receiving and sending digitally signed emails
For e-filing income tax returns
For signing documents such as MS Excel, MS Word and PDFs

What is Class 2 and Class 3 digital signature?

Class 2 Certificate: These are issued to business personnel and individuals. They confirm that the information in the application provided by the subscriber is the same as the information in popular consumer databases.

Class 3 Certificate: These are issued to individuals and organizations. They are high assurance certificates, mainly for the purpose of e-commerce applications. It is only issued when the individual appears in-person before the certifying authorities.

When is digital signature required for income tax return?

Digital signature is compulsory for entities whose accounts need to be audited under Section 44AB.

What is the process of digital signature?

To apply for a digital certificate, here is what needs to be done:

1 - Visit the website of a certifying authority and select your type of entity 2 - Enter all the necessary details 3 - Submit the required documents 4 - Make payment for digital signature certificate

Why is digital signature certificate required?

Just like how physical documents are signed manually, electronic documents are required to be signed digitally, and this can be done using a digital signature certificate.

Digital Signature for E-Filing Your Income Tax Return

Benefits of Digital Signature

Components of Digital Signature

Where can you Use Digital Signatures

How to Register Digital Signature While E-Filing Income Tax Return

Certifying Authorities for Digital Signature Certificates

How to Get a Digital Signature

Procedure for Uploading Income Tax Return Online Using Digital Signature

Registering Digital Signature (DSC) on GST Portal

FAQs

What are the various classes of DSCs?

What does a digital signature comprise of?

What are the benefits of using digital signatures?

How long is a digital signature certificate valid?

Who are the licensed Certifying Authorities that can issue the digital signature?

Who can use digital signature certificate?

Can digital signature be misused?

How is a digital signature created?

How can I create digital signature in e-filing?

How can I get digital signature?

How can we use digital signature?

What is Class 2 and Class 3 digital signature?

When is digital signature required for income tax return?

What is the process of digital signature?

Why is digital signature certificate required?

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