What is a Digital signature certificate?

Digital Signature Certificate(DSC) is an electronic format equivalent of a physical certificate. It serves as a proof of identity of an individual, to access services or other information on the internet or to sign documents digitally.

In simple words, a digital signature certificate is the online version of one’s physical signature.It is used to verify an individual’s authenticity, to sign documents digitally, verifying income tax return (ITR) etc.

DSC comes in the form of a USB token with a validity of around 1 or 2 years and can be renewed when expired. It contains the name of the owner, public key details, serial number, information about certifying authority and digital signature etc. DSC can only be issued by the licensed Certifying Authorities approved by the Controller of Certifying Authorities(CCA).

There are three categories of DSC :
  • Class 1: This certificate is issued to the individuals and private subscribers.
  • Class 2: This certificate is issued for both business personnel and individuals.
  • Class 3: This certificate is issued for individuals and organizations both.

Who is required to use a digital signature for filing income tax return?

According to Section 44AB of the Income Tax Act, a digital signature is compulsory for a professional and individual having an annual income of Rs. 25 lakh and more. On the other hand businesses with a turnover of over Rs. 1 crore needs to file ITR online.

Which are the licenced certifying authorities that can issue the digital signature?

Following are the licenced certifying authorities that can issue the digital signature certificate:

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

How to file ITR using digital signature?

It is a two step process where you first need to register DSC with the tax department on their official website. Post which it can be used for filing your Income Tax Return.

How to register DSC with the Income Tax department?

To get registered and use digital signature for the purpose of e-filing the income tax returns, the following steps need to be followed:

  • 1.) Visit the Income tax India website. Login using the User ID and Password.
  • 2.) From the main menu go to the ‘Profile Setting’ and click on the ‘Register Digital Signature Certificate’.
  • 3.) From the landing page, by clicking on the link given on the page download the DSC Management Utility. Extract the ZIP folder and open the DSC management utility.
  • 4.) Click on the ‘Register/Reset Password’ using DSC in the DSC management utility.
  • 5.) Insert the DSC USB token in the port of the laptop/desktop.
  • 6.) Enter the E-filing User ID and PAN of the DSC registered in e-Filing. In case of NRI User this is not a Mandatory Field.
  • 7.) Select the type of the DSC ( USB Token / .pfx file) and Generate the signature file.
  • 8.) Attach and submit the signature file by going back on to the e-filing portal.

On the successful registration of the DSC, a confirmation mail shall be sent on the registered Email ID. Registration of the DSC is the first and initial step in the process of e-filing of the IT Return with DSC.

How to upload an ITR online using Digital Signature Certificate (DSC)?

To upload an ITR online using the DSC, follow the steps mentioned below:

  • Step 1. Visit the e-filing portal and from the link provided on the website at the time of XML upload, download ‘ITD e-filing DSC Management Utility’.
  • Step 2: Extract the zip folder and open the utility.
  • Step 3: Select ‘Submit ITR/ Form online’.
  • Step 4: Enter the e-filing User ID.
  • Step 5: Enter the PAN of the DSC registered in e-filing. For NRI users, this is not a mandatory field.
  • Step 6: Select the type of DSC -
    1. Using .pfx File:
      a.) Click on the ‘Browse’ button to select a valid ‘.pfx’ file.
      b.) Enter the password for the ‘.pfx’ file.
      c.) Click the ‘Generate Signature File’ button.
      A message of successful completion of the process will be displayed and a signature file will be generated and saved at the location where ZIP was stored.
    2. Using USB Token Step:
      a.) Select a valid USB token certificate.
      b.) Enter USB token PIN.
      c.) Click on the ‘OK’ button.
      A message of successful completion of the process will be displayed and a signature file will be generated and saved at the location where ZIP was stored.

Do I need to e-verify an Income Tax Return when I file using DSC?

In case you have filed an Income Tax Return by attaching a Digital Signature Certificate there is no need to e-verify it separately. In other cases e verification can be done by either of the prescribed modes. The step by step process for which can be referred to here.

How to apply for a digital signature certificate?

To apply for a digital signature certificate an individual needs to follow the steps below:

  • Step 1: Log on to the website of a certifying authority. Now, you will be directed to the Digital Certification services’ section, from the list choose the type of entity for which you want to obtain the DSC. For instance, if you are applying for an individual DSC, click on the ‘Individual’ option. A new tab will be displayed with the DSC Registration form. Download the form.
  • Step 2: After downloading the form, the next step is to fill in the following necessary details-
    1. i.) Class of the DSC
    2. ii.) Validity
    3. iii.) Type: Single signature or Signature and Encrypt
    4. iv.) Applicant Name and Contact details
    5. v.) Residential address
    6. vi.) GST Number along with the details of proof documents
    7. vii.) Declaration
    8. viii.) Documents as identity proof and address proof
    9. ix.) Attestation Officer
    10. x.) Payment details
    After filing up all the required details, you need to affix a recent photograph along with your signature under the declaration. Check the furnished details carefully and take a print of the form.
  • Step 3: The supporting documents submitted as identity and address proofs should be attested by the attesting officer. You need to ensure that the sign and seal of the attesting officer should be clearly visible on the documents.
  • Step 4: For the payment of the DSC, a demand draft or cheque should be obtained in the name of the Local Registration Authority where you are planning to submit your application for verification.
  • Step 5: The last step is to post the documents. Enclose the DSC registration form duly filled along with a supporting document for Proof of Identity and proof of address and Demand draft/Cheque for payment in an envelope and post it to the designated address of the LRA (Local Registration Authority) for further processing.

Frequently Asked Questions

Q- Which are the three different classes of DSC?

There are basically 3 types/ classes of a digital signature certificate as described below.

  • Class 1: This class of DSC is issued to business houses & to private subscribers and individuals. It provides a basic level of assurance that information provided by the subscriber matches with the database of Certifying Authority. It is used for both business and private use.
  • Class 2: This DSC provides a moderate level of assurance & is issued to an individual as well as to business personnel. It is useful for securing transactions having substantial monetary value, private information etc. These Digital Signatures are required to file documents electronically with various government authorities like the Income-Tax Department, Ministry of Corporate Affairs, etc.
  • Class 3: This level of DSC is issued to individuals & organizations only when they are physically present before the Certifying Authority. It is useful for transactions which involve a high level of fraud risk. E-commerce companies like Amazon, Flipkart etc use Class 3 DSCs. Class 3 Digital Signatures are used to participate in E-auctions/E-tenders. Various government entities like the Railways, Banks, Road Transport authorities, power board, etc, require Class 3 Digital signature to participate in e-auctions.

Q- Which class of DSC can be used for efiling of ITR?

Class 2 Digital Signature is required to file the documents electronically with the various government departments like IncomeTax department, Ministry of Corporate Affairs etc.

Q- Can digital signature be misused?

There is minimum to no chance for a digital signature to be misused.

Q- How is a digital signature created?

The creation of digital signature is a complex process where numeric values are used and represented as a sequence of different characters.

CA Abhishek Soni
CA Abhishek Soni

Abhishek Soni is a Chartered Accountant by profession & entrepreneur by passion. He is the co-founder & CEO of Tax2win is amongst the top 25 emerging startups of Asia and authorized ERI by the Income Tax Department. In the past, he worked in EY and comes with wide industry experience from telecom, retail to manufacturing to entertainment where he has handled various national and international assignments.