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Digital Signature: All you need to know

Technological advancements have simplified the entire process of tax filing and submitting returns over the internet. For the purpose of e-filing income tax returns, taxpayers are required 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.

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

Components of Digital Signature

In order to know how a digital signature works one must first understand the components 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 unique public key associated with it. This public key is used in the process of encrypting and securing a document when it is being authorised and is also vital 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 indicates the time frame during which a digital signature is valid. Public key is also helps in resetting the digital signature, if necessary.

  • 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.

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”.

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 taxpayerConditionManner of furnishing return of income
Individual or HUFAccounts are required to be audited under Section 44AB of the Income Tax ActElectronically under digital signature
CompanyIn all casesElectronically under digital signature
A person required to furnish the return in Form ITR-7In case of a political partyElectronically 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-5Accounts are required to be audited under Section 44AB of the Income Tax ActElectronically 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: You will be redirected to the Register Digital Signature Certificate page. Click on the drop-down list that says “PAN of Authorized Signatory”. Select the PAN of the authorized signatory that 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. Click on the drop-down list that says “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 different classes of digital signature certificates?

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:

  • 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

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:

EstablishmentProprietor
Hindu Undivided FamilyKarta
PartnershipManaging Partner
Trust RegistrationManaging Trustee
LLP/CompanyAuthorized signatories with due authorization from the LLP/board of the company
Society, clubAuthorized signatories with due authorization from management committee
Statutory BodyAuthorized signatories
Local AuthorityAuthorized signatories
Government DepartmentAuthorized signatories

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