All about Digital Signature Certificate (DSC) - What it is ? Who needs it ? Where can we get it?

What is a Digital Signature Certificate (DSC)?

• A Digital Signature Certificate (DSC) is an electronic form of a signature used for authentication in digital transactions.

• It ensures data integrity, authenticity, and security in electronic documents.

• DSCs are legally valid for electronic signatures and authentication under Section 3 of the IT Act which states “Authentication of electronic records : Subject to the provisions of this section, any subscriber may authenticate an electronic record by affixing his digital signature.”

• One can use only valid Digital Signature issued to him/her. It is illegal to use Digital Signatures of anybody other than the one to whom it is issued

Who can issue a Digital Signature Certificate (DSC)?

• DSC is issued by Certifying Authorities (CAs) under the Information Technology Act, 2000.

  Certification Agencies are appointed by the office of the Controller of Certification Agencies (CCA) under Sec 24 of IT Act, 2000. Some of the Certifying agencies are :

  • National Informatics Center (NIC)

  • IDRBT Certifying Authority

  • E-MUDHRA

  • (n) Code Solutions CA

  • SafeScrypt CA Services

  • Care4Sign

  • IDSIGN

    
    

Who needs Digital Signature Certificate (DSC)?

• Company Directors & LLP partners for filing with the Ministry of Corporate Affairs (MCA). Class-III DSC required for MCA21 Filings.

• Businesses & professionals for GST, Income Tax, and PF filings. Secure licenses and permits required for your business operations electronically

• Government contractors for e-tendering and procurement. Participating in E-auctions.

• Legal professionals & individuals for court filings and secure document signing.

• Importers & exporters for DGFT-related transactions.

Types of Digital Signature Certificate (DSC)?

• Class 3 : Can be issued for Individuals or Organisations. Class 3 DSCs offer the highest level of authentication in India. These DSCs ideal for high-value financial transactions, legal contracts, and government e-filings. Validity period can be 2 or 3 years. Several government processes in India, like MCA e-filing and Income Tax e-filing, now require Class 3 DSCs for legal compliance and secure online interactions.

• DGFT : Issued exclusively for Directorate General of Foreign Trade (DGFT) transactions. Used by importers and exporters for online document submission.

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As per the Controller of Certifying Authorities (CCA) notification, from January 1, 2021, Class 2 DSC has been discontinued, and only Class 3 DSC is now issued for all use cases, including MCA filings, income tax returns, and e-tendering.

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What are the benefits of Digital signatures ?

• Mandatory : For individuals with annual gross receipts exceeding certain threshold and businesses with annual turnover exceeding certain threshold, using a DSC for e-filing is no longer optional, it's mandatory.

• Legal Validity: Think of your ink-and-paper signature as a respected citizen, and your DSC as its digital doppelganger. Under the Information Technology Act, 2000, your DSC carries the same legal weight as its traditional counterpart, making it admissible as evidence in court and binding in contracts. Your word, now digitally enshrined, commands respect in the virtual courtroom.

• Security : Forget forgery fears. DSCs embed a unique, encrypted signature into your tax returns, safeguarding them from tampering and manipulation. Your digital handshake carries legal weight, making your e-returns admissible in court.

• Convenience : Ditch the printer, scanner, and mailing woes. With a DSC, you can e-file your tax returns anytime, anywhere, with just a few clicks. No more queues or paper trails, just digital efficiency at your fingertips.

• Faster Approvals: Say goodbye to bureaucratic delays. DSCs expedite the verification process, ensuring your tax returns are processed faster, leaving you free to focus on more important things.

Step-by-Step Guide to MCA Compliance with DSC:

1. Obtain a DSC : Choose a reputed Certifying Authority (CA) and register for a Class 3 DSC, suitable for most MCA e-filings.

2. Download the eToken Software : Install the relevant software provided by the CA on your computer.

3. Import the eToken : Connect the eToken (hardware device containing your DSC) to your computer and follow the on-screen instructions to import it.

4. Register on the MCA Website : Visit the MCA's official website (MCA Website) and register your company.

5. Prepare the Required Documents : Gather and prepare the necessary documents for the specific compliance filing you need to make.

6. Sign and Submit : Use your DSC to sign the documents electronically and submit them online through the MCA portal.

7. Track the Status : Monitor the processing status of your filings and follow up with the MCA if needed.