Digital Signature

An equivalent of physical signature in digital format is known as the digital signature. It establishes the identity of the sender of an electronic document on 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. 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. 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.

Important Aspects Of Digital Signature

E – Token

Digital Signature Certificate is stored on a secure USB flash drive called an E-Token. For signing any document electronically, the USB flash drive must be connected to a computer.


The digital signature comes with a validity of one or two years. The validity can be renewed once the old one expires.

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