Using Digital Signature Certificate to authenticate ITR

Online tax filing facility is a convenient method of submitting Income Tax returns through a hassle-free and efficient process. To submit or e-file income tax returns online, taxpayers and assesses must affix their Digital Signature to the tax return document for authentication purposes. A Digital Signature Certificate (DSC) is a Digital Signature issued in an electronic form used to authenticate digital or electronic documents.

For Hindu Undivided Family (HUF) firm, Limited Liability Partnership (LLP) (whose accounts are required to be audited as per Section 44AB), political parties and companies, it is mandatory to verify income tax returns (ITR) through DSC. Other taxpayers may also use DSC to file their returns. There is no need to verify ITR with Aadhar based OTP in case DSC is used to authenticate the ITR.

Digital signatures are issued by Certifying Authorities (CA) and are approved by Controller of Certifying Authorities (CCA). Under the Income Tax Act, 2000, DSC is given the same status as handwritten signatures. DSC’s are generally valid for 1 to 2 years and issued in the form of a USB token, which verifies and attest that the owner of the signature has authenticated the (digitally) signed document, in a secure, fraud-free environment. Digital signatures are signed using the private key assigned to that particular Certification Authority. The Public Key Infrastructure (PKI) is the technology used for digital signatures.

Digital Signatures cannot be disowned or claimed as forgeries by the signatory – as there are checks in place to verify the same, digitally signed documents are also protected from further editing (post-signature) and verify that the document has been attested and verified by the person who signed it.

Digital Signatures Consist of:

• The Owner’s name
• The Owner’s public key
• The Expiration date of the Owner’s public key
• The name of the Issuing Certification Authority
• Serial Number assigned to the digital signature
• Digital signature of the issuer

A physical copy of the tax return need not be submitted if e-filing is being done with a digital signature.

Registering a Digital Signature with the Department of Income Tax:

Step 1: Visit https://incometaxindiaefiling.gov.in and login with registered PAN and Password.

Step 2: From the main menu go to Profile Settings > Register Digital Signature Certificate.

Step 3: Download DSC Management Utility from the link given on the landing 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. 

Verify Income Tax Return using a Digital Signature:

Step 1: Download the latest DSC management utility from the e-filing portal. Extract the zip folder and open the utility.

Step 2: Select the third tab from the dropdown – 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 – 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.

Using a digital signature to e-file income tax return has numerous benefits, streamlining the efficiency of the process. It guarantees a reduction in fraud and misrepresentation. This helps in ensuring that the taxpayers are individually responsible for submitting the returns in a timely manner. Also, it also assists the Income Tax Department to start processing the refunds as soon as the file has been uploaded.

– Article by Lion Amir Virani, Tax Consultant, LRAs for Sify