In this new technical age, everything has gone online. It is also true for ITR Filing. Now, everyone can file ITR at the comfort of their home or office. However, there are some prerequisites to fulfill when filing ITR online. For example, individuals and professionals with an annual gross receipt of more than INR 25 lakhs, as well as businesses with an annual turnover of INR 1 crore and above, are required to file income tax with a Digital Signature Certificate. But, it is important to note that anyone can get a digital signature for income tax and you should also get it because of the benefits that it offers. In this article, we will learn the complete process of how to use digital signature for income tax.
What is a Digital Signature Certificate?
DSC stands for Digital Signature Certificate and is a type of digital identification. A DSC, like a passport or a driver’s license, serves as a vital form of identity.
The DSC may also be used as a highly secure and user-friendly digital sign. To put it another way, modern techniques such as digital signature certificates are being used to authenticate and encrypt documents.
It is also one of the safest ways to submit papers electronically, and anybody may use it to sign electronic forms.
To obtain the DSC, you must submit an application to the certifying body (CA). In India, there are three different types of digital signature certificates. The following are the three types of digital signature certificates.
- DSC Class 1
- DSC Class 2
- DSC Class 3
In simple words, A Digital Signature is a Certificate that proves the validity of digital information or document. The existence of a person’s Digital Signature implies that the individual accepts the contents of the electronic message. Each individual is assigned a unique Digital Certificate, which aids in determining the Digital Signature belongs to a particular person.
What is ITR Filing? Why do Income Tax Return Filing?
An income tax return is a form that a person fills out to report to the government his or her earnings, expenses, tax deductions, investments, and taxes, amongst many other things.
Under the Income Tax Act of 1961, a taxpayer is required to file an income tax return due to multiple reasons. A taxpayer, for example, may want to do an Income Tax Return Filing report his income for the year, carry forward losses, claim a tax refund, and claim tax advantages, etc.
How do Digital signature Certificates work?
A digital signature verifies the authenticity of electronic documents in the same way as a handwritten signature verifies the authenticity of printed papers. This signature can’t be faked, and it proves that a certain individual wrote or consented to the file to which it’s attached.
The receiver of a digital certificate document may confirm that the message came from the individual whose signature is on the document and that it’s not been altered after it was verified, whether deliberately or inadvertently.
In addition, a document’s signer cannot afterward allege that his or her signature was falsified. In other words, digital signatures allow for the “authentication” and “non-repudiation” of electronic messages, ensuring that the receiver is aware of both the sender’s identity and the message’s authenticity.
How to use Digital signatures for Income tax Return filing?
Using digital signatures for income tax return filing is an easy plus simple task. You can follow the steps mentioned below.
- Register an account on the official income tax portal.
- Login into the web portal of the Income Tax Department.
- Now go to the Accounts tab and click on the update Digital Signature Certificate option.
- The download process will start and after its completion, you have to save it on your system.
- Now once again go to your user account on the Income Tax Department Website. Click on Upload your USB token and after redirecting go to select your USB token Certificate.
- Go to the browse button and upload the downloaded file. Enter the PIN and click on the sign.
What are the Benefits of Digital signature for Income tax return filing?
- A digital signature is more secure than any other type of signature, whether traditional or electronic.
- Digital signatures are recognized by India’s government, as well as the majority of countries throughout the world.
- The chances of a cyber attack or fraudulent email stealing important information are little to none.
- After you sign, your papers are safe and cannot be changed or altered in any way.
- When you file your income tax return on time utilizing DSC, you are able to carry over any business and capital losses you may have had during the year, which can be balanced towards income received in later years, allowing you to save money on taxes.
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