It is mandatory for an individual, HUF and firm to file income tax return using the Digital Signature Certificate. Here's how to do it.
A digital signature is an electronic form of a signature that can be used to authenticate the signatory of a document. It is used to sign the documents digitally and to authenticate the electronic documents. A Digital Signature Certificate (DSC) is the electronic format of physical or paper certificate that serves as a proof of identity of an individual. These certificates can be issued only through licensed Certifying Authorities (CA) approved by the Controller of Certifying Authorities (CCA), Government of India.
DSC comes in the form of USB token, generally has a validity of 1 or 2 years and is renewable on expiry. It is an easy and hassle-free process to file the IT return using the Digital Signature. This is also considered a secure way to file the Income-Tax Return (ITR).
It is mandatory for an individual, HUF, firm, LLP (if their accounts are required to be audited under the provisions of Section 44AB), political parties and companies to file the ITR using the DSC (Class 2). Other taxpayers can also voluntarily use the DSC to file the income-tax return. If the return is signed digitally, then it is neither required to verify the return using Aadhaar-based OTP, nor to send the signed hard copy of ITR-V to the CPC Bengaluru. The taxpayer just needs to affix the DSC to the tax return to authenticate it. Before verifying the ITR using DSC, it is mandatory to register the DSC on the income-tax e-filing website.
DSCs are available in three classes – Class 1, Class 2 and Class 3.
Class 1 Digital Signatures are issued to individuals/private subscribers and offer lowest level of assurance. It is used for both business and private use. It is used to digitally sign the non-commercial or low-value transactions where proof of identity is unnecessary.
Class 2 Digital Signatures are required to file documents electronically with various government authorities like the Income-Tax Department, Ministry of Corporate Affairs, etc. It is used for income-tax e-filing, companies incorporation, ROC filings, etc.
Class 3 Digital Signatures are used to participate in E-auctions/E-tenders. Various government entities like the Railways, Banks, Road Transport authorities, power board, etc., require Class 3 Digital signature to participate in e-auctions.
How to Register the DSC on E-filing website?
The Digital Signature Certificate is to be registered on the website of the Income-Tax Department. This is necessary to ensure that the authorized person and DSC verify the tax return. DSC can be registered in the following steps:
Step 1: Visit www.incometaxindiaefiling.gov.in and login with registered PAN and Password.
Step 2: After log-in, from main menu go to Profile Settings > Register Digital Signature Certificate.
Step 3: From the landing page, download DSC Management Utility from the link given on that page. Extract the ZIP folder and open the DSC management utility.
Step 4: Go to the second tab Register/Reset Password using DSC in DSC Management Utility.
Step 5: Insert the DSC USB token in USB port of Computer/Laptop.
Step 6: Enter the E-Filing User ID and PAN of the DSC (Registered in E-Filing).
Step 7: Select the type of DSC (USB Token) and generate the signature file.
Step 8: Go back again to the e-filing portal and attach the Signature File (generated in Step 7) on the page of Register Digital Signature Certificate and submit.
On successful registration of DSC, a confirmation email shall be sent on the registered Email ID.
Registration of DSC is the first step in the process of verification of the Income-Tax Return with DSC. Once it is registered, the next step is to verify the ITR, which can be done with the following process.
How to Verify ITR using DSC?
Step 1: Download the latest DSC management utility from e-filing portal. Extract the zip folder and open the utility.
Step 2: Select the third tab Upload XML in the DSC management utility and Browse the .XML File generated from Excel or Java Return filing Utility. In case the return is being prepared from the online e-filing account, then use the fourth tab of Submit ITR/Form Online.
Step 3: Select the type of DSC (USB Token) and generate the signature file.
Step 4: Go back to the e-filing website. Select the radio button of Digital Signature Certificate at the time of uploading of ITR XML file.
Step 5: Upload the Signature file along with XML file at the time of e-filing.
(By CA Naveen Wadhwa, DGM, and CA Tarun Kumar, Assistant Manager, Taxmann.com)