Last Updated on February 11, 2026
Digitalisation has changed how Indian businesses authenticate documents, execute contracts, and comply with statutory obligations. From company incorporation to bidding in government tenders, digital signatures have become a legal and operational necessity. This article elaborates on digital signatures and their prominence in conducting business in India.
What is a Digital Signature?
Digital Signatures refer to an electronic method of signing documents electronically by using cryptographic technology. This also allows users to confirm their identities and verify that their documents have not been altered since being signed after signing.
In India, digital signatures are governed by the Information Technology Act of 2000, which provides for legal recognition of electronic records to which identified cryptographic systems have been used. Digital Signature Certificates may only be issued by Certifying Authorities who have been licensed by the Government, which falls under the regulatory authority of the Controller of Certifying Authorities (CCA).
A digital signature is generated using a Public Key Infrastructure (PKI), ensuring security, authenticity, and legal enforceability involving:
- A private key (used by the signer)
- A public key (used for verification)
Why Digital Signatures are Critical for Businesses Today?
The compliance and regulation systems in India are increasingly reliant on the use of authentic online submissions. The Ministry of Corporate Affairs (MCA) and other regulatory agencies, and even electronic portals used for e-procurement, have all made the use of digital signatures mandatory for submission of filings and approval processes.
Digital signatures have three major benefits for businesses:
- Regulatory Compliance
- Risk Minimization
- Operational Efficiency
What is a Digital Signature Certificate (DSC)?
A DSC is an electronic declaration provided by a registered Certifying Agency that validates a person’s identity and associates that person with two unique keys through the use of Cryptography.
The contents of a DSC include:
- The name of the holder
- The public key of the holder
- The date on which the DSC begins and ends
- The name and address of the Certifying Agency (CA) that issued the DSC
Types of DSC in India
Table 1: Classification of DSC Based on Security Level
| Type of DSC | Level of Security | Verification Method | Permitted Usage |
| Class 1 DSC | Basic | Verification against the Certifying Authority database | Securing email communication and low-risk transactions |
| Class 2 DSC | Moderate | Identity verification against trusted pre-verified databases | Earlier used for tax and MCA filings (uses largely phased out) |
| Class 3 DSC | Highest | Physical or video-based identity verification | High-value and sensitive electronic transactions |
Table 2: DSC Classification Based on Purpose of Use
| DSC Category | Function | Key Benefit | Typical Users |
| Signing DSC | Used to digitally sign electronic documents | Ensures authentication, integrity, and non-repudiation | Directors, partners, professionals, authorised signatories |
| Encryption DSC | Used to encrypt confidential data | Ensures confidentiality and data security | Organisations handling sensitive information |
| Signing + Encryption DSC | Combines both signing and encryption functionalities | End-to-end security for digital transactions | Corporations, regulated entities |
Applications of Digital Signatures in Business and Compliance
Digital signatures are widely used across business and regulatory functions, including:
- Company incorporation and ROC filings
- Income-tax audits and returns
- GST compliance and submissions
- Board resolutions and shareholder approvals
- Employment and vendor agreements
- Government tenders and procurement
Features of Digital Signature
1. Authentication
A document can be authenticated when a digital signature is affixed to it.
2. Integrity
Once a document is digitally signed, the digital signature becomes invalid if any modification is made to the document after the affixation.
3. Non-Repudiation
Digital signatures provide the signer with a non-repudiation policy, meaning the signer has no right to deny the signature on the signed document in a legal dispute, in other commercial situations or when audited.
4. Legal Validity
The Information Technology Act, 2000, clearly states that digital signatures generated via approved cryptographic algorithms are equivalent to handwritten signatures, enabling the digital signature to have the same legal effect.
5. High Security with Cryptography
Digital signatures are created using an asymmetric crypto system that uses two different kinds of keys – a public key and a private key. These key systems provide a high level of security against print forgery or any kind of undesirable use of a signed document.
6. Efficient and Speedy Workflow
Digital Signatures allow users to do away with printing, couriering and manually verifying the authenticity of signatures, thereby providing them with the ability to sign anywhere in the world.
7. Large Savings on Cost and Resources
Digital signing allows businesses to do away with the need to print and use physical signatures and to be able to use a digital signature to commit themselves to a contract or sign other paperwork, thereby significantly lowering the costs associated with printing and storing documents and mailing them, as well as administrative fees.
8. Accessibility from Anywhere in the World
Through such modern e-signature technologies as Aadhaar-e-Sign, digital signature technology allows users to electronically sign and authenticate documents, which means that signing and authenticating can occur anywhere in the world, without the user having to be present on-site.
How Kanakkupillai Can Help?
Navigating the requirements for digital signatures can be quite overwhelming. To help you, Kanakkupillai provides total end-to-end assistance to help you get your digital signature certificate quickly and easily.
Here are just some of the services offered by Kanakkupillai:
- Determine which type of DSC would work best for your business.
- Help you complete all required documents/identity verification;
- Assist you in applying for and securing a license certifying authority to obtain your DSC;
- Assist you with the renewal/replacement of any expired DSC;
- Help you with integrating your DSC with the MCA/GST/tax portal, etc.
- Ongoing compliance support for all statutory filings.
If you have received proper guidance from an expert, you will avoid any procedural errors, delays and possible non-compliance related to the use or expiration of your digital signatures.
Conclusion
Modern businesses have no choice but to use digital signatures; they are legally and technologically mandated by law, technology, and government policy. As India continues its digital governance development efforts, companies that use secure digital authentication today will have an advantage in compliance, scalability, and future growth opportunities.
Frequently Asked Questions (FAQs)
1. How do I create a digital signature?
A digital signature is a legally recognised electronic method of authenticating documents using cryptographic technology under the Information Technology Act, 2000.
2. What is a digital signature?
A digital signature is created by obtaining a Digital Signature Certificate from a government-licensed Certifying Authority after completing identity verification.
3. What is a Class 3 digital signature?
A Class 3 digital signature is the highest security digital certificate used for MCA, GST, income tax filings, and e-tendering in India.
4. What is the price of 2 year DSC?
The price of a 2-year Digital Signature Certificate generally ranges between ₹1,500 and ₹3,000, depending on the certificate type and issuing authority.
