The Digital Signature Certificates (DSC) utilized in India effectively serve as the digital equivalent of a hand written signature which has extra data attached electronically to any message or document. DSCs also ensure that no alterations are made to the data once the document has been digitally signed. A DSC is normally valid for one or two years, after which it can be renewed.
Digital signatures are easily transportable, cannot be imitated by someone else, and can be automatically time-stamped. Furthermore, the ability to ensure that the original signed message arrived means that the sender cannot easily repudiate it later.
All DSCs contain the digital signature of the certificate-issuing authority so that anyone can verify that the certificate is real.
The Information Technology Act (2000) provides for use of DSCs on documents submitted in electronic form in order to ensure the security and authenticity of the documents filed electronically. This is the only secure and authentic way that a document can be submitted electronically. As such, all filings done by companies under the MCA21 e-Governance program are required to be filed with the use of DSCs by the person authorized to sign the documents.
Three classes of Digital Signature Certificates:
Class 1 DSCs are used to confirm identification by stating that a particular username/email ID belongs to a particular person. However, Class 1 DSCs may not be used to sign business documents.
Class 2 DSCs are issued to individuals or organizations for a variety of purposes, including e-filing for individual income tax returns. Class 2 DSCs are also used by chartered accountants or company secretaries for their clients, for internal use, or for new company incorporations.
Class 3 DSCs, which are issued by the Controller of Certifying Authorities, provide India’s highest level of assurance and are mainly used for e-tendering, e-procurement or e-bidding. However, Class 3 DSCs are also issued to individuals and organizations for personal and commercial use. In such cases, they are typically used for electronic data exchange, internet banking, and other web-based transactions where confidentiality and authenticity are critical.
Penalties for Misrepresentation
The Information Technology Act (2000) governs DSCs in India, and provides for various penalties which are levied on those who contravene its provisions. The offender may be punished either with penalties or may also be imprisoned in cases whereby the offense is of a serious nature.
Any person who makes misrepresentation, or suppresses any material fact when obtaining a DSC, shall be punished with imprisonment for terms which may extend to two years, and/or through fines which may extend to INR100,000.
Similarly, any person who knowingly creates, publishes or otherwise makes available a DSC for any fraudulent or unlawful purpose shall be punished with imprisonment for a term which may extend to two years, and/or with fine which may extend to INR100,000.
Practical Aspects of Obtaining a Digital Signature Certificates in India
DSCs may be obtained from a certification agent that is duly registered with the Controller of Certifying Authorities. In India, there are quite a few certification agents who are authorized to provide digital signatures, such as: MTNL, TCS, Satyam, N-Code, e-mudhra.
DSCs may take as long as seven or eight working days to process, and the following documents are required when applying for a DSC:
- Application form duly filled in by the applicant
- Self-attested copy of PAN card (in case of resident applicant)
- Self-attested copy of address proof (in case of resident applicant)
- Notarized copy of passport (in case of non-resident applicant)
- Notarized copy of address Proof (in case of non-resident applicant)
Once completed by the certification agent, DSCs may be available in two modes:
- 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.
- 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.
Uses of Digital Signature Certificates in India
In India, Digital Signature Certificate was first used by Registrar of Companies (RoC) when the Ministry of Company Affairs transitioned into e-filing of statutory returns. The benefits accrued through the same was adopted by other government agencies in India and today its being widely used. Some of the popular uses of DSC are as below:
1. e-filing of Income Tax Returns :An assessee can file his/her Income Tax Return online and those who sign their returns digitally do not have to send the physical copies of the same to the Income Tax Department for verification.
2. e-filing of Company Returns (RoC) :To ensure statutory compliance for companies in India, the Registrar of Companies (RoC) has now made e-filing mandatory and a Digital Signature Certificate is required to do the same.
3. e-tender / e-Procurement :Many of the state governments as well as other government agencies in India have transitioned to e-procurement and you need a Digital Signature Certificate to bid for tenders online.