Digital Signatures

Digital signature certificates or DSC are required for filing income tax returns, company filings, import export clearance and e-tenders.

A Digital Signature is the equivalent of a physical signature in electronic format, as it establishes the identity of the sender of an electronic document in the Internet. Digital Signatures are used in India for online transactions such as Income Tax E-Filing, Company or LLP Incorporation, Filing Annual Return, E-Tenders, etc., There are three types of Digital Signatures, Class I, Class II and Class III Digital Signature. Class I type of Digital Signatures are only used for securing email communication. Class II type of Digital Signatures are used for Company or LLP Incorporation, IT Return E-Filing, Obtaining DIN or DPIN, and filing other forms with the Ministry of Corporate Affairs and Income Tax Department. Class III type Digital Signatures are used mainly for E-Tendering and for participating in E-Auctions. Digital Signatures come in the form of a USB E-Token, wherein the Digital Signature Certificate is stored in a USB Drive and can be accessed through a computer to sign documents electronically.

With E-Return filing becoming mandatory for Income Tax Assesses with an income of over Rs.5 lakhs per annum, the requirement and prevalence of Digital Signatures has increased manifold.

E-Token

Digital Signature Certificate are stored on a secure USB flash drive called a E-Token . The Digital Signature Certificate stored in the USB flash drive must be connected to a computer to electronically sign a document.

Class II Digital Signature

Class II Digital Signatures are used for Income Tax E-Filing, Company or LLP Incorporation, Annual Return Filing, etc., Class II Digital Signatures are required to file documents electronically with the Ministry of Corporate Affairs and Income Tax Department.

Class III Digital Signature

Class III Digital Signatures provide the highest level of assurance and are used for E-Auctions and E-Tendering. Government entities like the Indian Railways, Banks, etc., require Class III Digital Signatures to participate in their E-Tenders.

Validity

Digital Signatures usually come with a validity of one or two years. The validity of the Digital Signature can be renewed once the term of the previous Digital Signature expires.