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Importance of Digital Signature Certificate or DSC’s in Personal and Business Transactions

Narendra Kumar

| Updated: Aug 05, 2016 | Category: Compliances

digital signature

The digital signature is issued for authentication of any electronic record by a subscriber i.e. which typically contains the: owner’s public key by using an electronic method or procedure. It is important to understand the basic concepts relating to digital signature before going into details of provisions relating to a digital signature. On an application by a person, the certifying authority will issue an Electronic signature certificate prescribed by the Central Government.

A Digital signature certificate takes the concept of traditional paper-based signing and turns it into an electronic “fingerprint.”

Key features of Digital Signature Certificate

  1. This Electronic/Digital signature certificate is unique to both the document and the signer and binds both of them together.
  2. The digital signature ensures the authenticity of the owner’s signature; he does not have to submit a physical copy of the return.
  3. A digital signature certificate is a scheme or technique used for validating the authenticity and integrity of digital messages or documents.

Who issues a Digital Signature Certificate?

The Certifying Authority issues a Digital Signature Certificate.

Key Criteria while issuing a Digital Signature Certificate-

Section 36 of the Information Technology Act, provides that while issuing a digital signature certificate, a Certifying Authority shall certify that-

  1. The applicant has complied with the provisions of the Information technology Act and the rules and regulations made thereunder.
  2. The subscriber of the Digital Signature must hold the private key which is capable of creating a digital signature and also holds the private key corresponding to the public key, listed in the digital signature certificate.
  3. The Private and Public keys constitute a functioning key pair.
  4. The information contained in the Digital Signature Certificate is accurate.
  5. The Public key to be listed can be used to verify a digital signature affixed by the private key held by the subscriber.
  6. Authentication of electronic documents by a Digital Signature Certificate.

Areas where the Digital Signature Certificate is used?

Digital Signature Certificate is used for-

  1. Electronic filing of Income tax returns.
  2. Electronic filing for the Incorporation of the Company.
  3. Affixing the digital signature by the Chartered Accountants, Company Secretaries, and Cost Accountant.
  4. Electronic filing of Government tender.
  5. Electronic filing for the application of Trademark & Copyright.
  6. The Electronic signing of Agreements and Contracts(Where a digital signature is required).

Classification of Digital Signature Certificate

The digital signature is classified into 3 different classes-

  1. Class I DSC The Class I DSC validates the email identification of the user. Class I DSC can be used by employers during communications with their employees
  2. Class II DSC The Class II DSC confirms that the information provided by the subscriber in the application does not conflict with the information in a well-recognized consumer database. It is issued for both personal and business purposes. Class II can be used for filing Income tax returns and for incorporation purposes.
  3. Class III DSC – Class III DSC is directly issued by the certifying authority and an applicant needs to present himself or herself in front of registration authority and prove his/her identity as the Class III DSC indicates the higher level of authenticity can be used to participate in e-tendering, Government agreement, auctions organized by the Public sector Companies.

Suspension of Digital Signature Certificate

The Section 37 of the Information Technology Act 2000, deals with the suspension of Digital Signature Certificate which provides that the Certifying Authority which has issued a Digital Signature Certificate is of the opinion that the DSC should be suspended in public interest may suspend the certificate on receipts of a request to that effect from the subscriber or the person duly authorised to act on behalf of that subscriber.

However, the suspension of the Digital Signature Certificate shall not be for a period exceeding 15 days unless the subscriber has been given an opportunity of being heard in the manner. The Certifying Authority shall communicate the order of suspension to the subscriber.

Revocation of the Digital Signature Certificate

On a request made by the subscriber or the person authorized by the subscriber, a certifying authority may revoke a Digital Signature Certificate issued by it. Additionally, there are certain conditions in which a Digital Signature certificate may be revoked i.e.-

  • Upon the death of the Subscriber,
  • Upon the dissolution of the firm or winding up of the Company and the subscriber is a firm or a Company.

Further, if the Certifying Authority believes that –

  • The material fact represented in the Digital Signature Certificate is false or has been concealed or the requirement of DSC was not satisfied.
  • Insolvency of the subscriber or death of the subscriber.

The authority may revoke the Digital signature certificate and may communicate the same to the subscriber. However, it shall not be revoked unless an opportunity of being heard in the matter is not given. communicate the same to the subscriber.

Also, read: Advantages of Registering a New Business in India by Using the Best Digital Platform- SPICe

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Narendra Kumar

Experienced Finance and Legal Professional with 12+ Years of Experience in Legal, Finance, Fintech, Blockchain, and Revenue Management.

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