Governments throughout the world are rapidly shifting from conventional paper-based methods to digital platforms for various administrative tasks in the present era of technology and digitization. One such substantial transition is seen in the domain of tax compliance, where Income Tax Returns (ITR) filing has become standard procedure in many nations. With the convenience and efficiency provided by digital platforms, the necessity for safe and dependable ways to validate electronic documents and transactions has become critical. This is where digital signatures come into play. In this article, you will learn about the role of digital signatures in ITR filing and how to use them.
What is a Digital Signature Certificate (DSC)?
A Digital Signature Certificate (DSC) is a secure electronic key issued by a Certifying Authority (CA) to confirm the identity of an individual or organization for signing electronic documents and transactions, much like a handwritten signature for physical documents. Users who opt for e-filing and want to sign ITRs, and statutory forms or respond to notices and refund reissue requests from the Income Tax Department are required to have a DSC as it verifies their identity. DSCs serve as proof of identity for specific online or computer-based purposes and are mandatory for e-filing users who have chosen to use this feature.
Why is a DSC Required for ITR Filing?
A Digital Signature Certificate (DSC) is necessary for Income Tax Return filing for two main reasons. Firstly, it is used to sign the ITR, which is mandatory for users who have chosen to use this feature. Secondly, it is used to verify responses to notices issued by the Income Tax Department and refund reissue requests and serves as proof of identity for specific online or computer-based purposes. Much like a handwritten signature authenticates a printed or handwritten document, DSCs are used to authenticate an electronic document or transaction. They can be used for many purposes, including identity verification. DSCs have a validity of two years and are encrypted and secure so that no duplicate signature can be made.
How to Register a DSC for ITR Filing?
Here are the steps to follow for registering a DSC for filing ITR online:
Step 1: Login to the e-filing portal using your ID and password.
Step 2: Access the Dashboard and go to the My Profile page.
Step 3: Click on Register DSC on the left-hand side of the screen.
Step 4: Choose the type of DSC you want to register (USB token or file).
Step 5: Enter the required details, such as DSC serial number, expiry date, and issuing authority.
Step 6: Upload the DSC file or connect the USB token to your computer.
Step 7: Click on the Submit button to complete the registration process. Once the DSC is registered, it can be used to sign ITRs and other electronic documents.
Benefits of Using a DSC for ITR Filing
Using a Digital Signature Certificate (DSC) for filing ITR has various advantages:
Security is one of the main benefits of using a DSC for ITR filing. A DSC ensures that the signed document is authentic and cannot be tampered with. It uses encryption and decryption mechanisms to prevent data breaches and cyber-attacks. This helps to create a safe and secure information exchange when filing income tax returns on the online portal
A DSC eliminates the need to sign the ITR, saving time and effort physically. It eliminates the necessity for printing, scanning, and couriering signed documents, making the procedure more convenient and hassle-free
Income Tax Returns (ITRs) that are signed using a DSC are processed at a quicker pace compared to those that are signed manually. This results in a reduction of the overall processing time. The reason behind this is that the Income Tax Department has the capability to electronically verify the validity of the signed document, eliminating the need for manual verification.
Opting for a Digital Signature Certificate (DSC) while filing ITR can save you money as it removes the requirement of printing, scanning, and sending the signed documents through courier. In addition, it helps to save time and energy, which ultimately decreases the total expenses of the filing procedure.
The use of digital signatures has transformed the way Income Tax Returns (ITR) are filed, offering benefits such as ease, safety, and effectiveness. Taxpayers are provided with the convenience of electronically signing their tax returns from any location, which guarantees prompt submission and adherence to regulations. By utilizing sophisticated encryption technology, the documents are kept secure and confidential, safeguarding any sensitive information they may contain. Digital signatures simplify the filing process and minimize the possibility of errors or delays by using automated verification and authentication.