Demystifying Digital Signatures and its Importance in Digital India

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Digital India!

India is surely leapingforward to the newly accrued status as “Digital India” courtesy the new Goods and Services Tax (GST).

Now registered assesses would sign and file their returns “online”, rather than by hand, thereby avoiding the hassles and harassment at the hands of middlemen.

Digital Signature Certificates (DSC), takes the centre stage in this revolution as it serves as the digital equivalent of hand written signatures and which can be attached to any message or document.

DSCs ensure that no alteration can be made to any document that has been electronically signed.

By norm today all DSCs are valid for 2 years and renewed thereafter.

Advantages of Digital signatures:

  1. They can be easily transported,
  2. They cannot be tampered by anyone
  3. They can be automatically time stamped
  4. It gives the document an authenticity
  5. It gives an authenticity to the sender

The Information Technology Act (2000) advocates the use of DSC for any document submitted electronically.

All filings done by companies under the MCA21 e-Governance program are required to be filed with DSCs of the person authorized to sign the documents.

DSCs are classified as:

Class 1
Used to confirm that a particular username/email ID belongs to a particular person. Class 1 DSCs may not be used to sign any business documents.

Class 2
Are issued to individuals or organizations for e-filing and for individual income tax returns. These are also used by Chartered Accountants or Company Secretaries on behalf of their clients, for internal use, or for new company incorporations.

Class 3
Are issued by the Controller of Certifying Authorities. They provide India’s highest level of assurance and are mainly used for e-tendering, e-procurement or e-bidding.

How Can you obtain a DSC in India?

DSCs may be obtained from a certification agent that is duly registered with the Controller of Certifying Authorities.

In India, thecertification agents who are authorized to provide digital signatures are MTNL, TCS, Satyam, N-Code and e-mudhra.

DSCs generally take about a 48hrs. timeto process. The following documents are required:

  1. Application form duly filled in by the applicant
  2. Self-attested copy of PAN card (in case of resident applicant)
  3. Self-attested copy of address proof (in case of resident applicant)
  4. Notarized copy of passport (in case of non-resident applicant)
  5. Notarized copy of address Proof (in case of non-resident applicant)

Once completed DSCs may be available in two modes:

  1. External device in the form of an E-token: This looks like a pen drive that is inserted into the computer every time one needs to sign a document.
  2. Internal device in the form of an attachment sent through a mail: This needs to be installed in the computer and requires a password to operate.

A DSC is linked to the Permanent Account Number (PAN) of the signatory, whose PAN is encrypted in a DSC token.

To obtain a DSC, signatories must provide a copy of their PAN and Aadhar cards (or other proof of address) to a Certifying Authority (CA), along with an application form.

DSCs Role in GST

DSCs replace handwritten signatures in Digital India and therefore it is become mandatory for all business organisations to have DSC. The DSC needs to be registered within the GST Common Portal.

Hope this information was useful. We look forward to your comments and feedback below.

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