Company law

Different Types of Digital Signature and Importance of Digital Signature

Types of Digital Signature and It’s Importance

Introduction

Our daily lives are linked with the usage of signatures. There are different types of digital signature with important purposes, such as establishing identification, securing the validity of a letter or document, or making revisions to a letter or document as proof that the modification has been approved. The growth of technology is followed by the creation and modification of signatures. Digital signatures are not only incredibly useful and simple to use, but also offer a high level of security.

What is Digital Signature?

A digital signature is created by using mathematical algorithms for verifying the authenticity and integrity of a message, software, or a digital document.

What are the types of Digital Signature?

The simplest digital signature is a simple one since it has no encryption protection. Simple digital signatures and basic digital signatures are pretty similar. The finest digital signature is Advanced & Qualified, which is equally valid in court as a wet paper signature. There are primarily three sorts of signatures, known as simple, basic and advanced digital signatures you should be aware of –

1. Simple Digital Signature

A Simple digital signature is a digital signature in it’s purest form because it isn’t encrypted. Numerous drawbacks exist with this straightforward digital signature. This signature cannot reveal the identity of the authenticator or modifications made to the document after the recipient has left their mark since it is not encrypted. Simple digital signature categories can also be extremely easily copied or faked. The usage of such digital signatures is not advised from a legal and security point of view.

2. Basic Digital Signature

Comparing Basic Digital Signatures to Simple Digital Signatures, there aren’t many differences. Basic Digital Signatures only differ from Simple Digital Signatures in that they may demonstrate modifications made to a document after it has been signed. This signature cannot refer to a confirmed identification, thus it cannot ensure the protection of your identity. Basic digital signature service providers do not properly authenticate the user’s identity even employing the cryptography method. Additionally, the signing procedure does not use two-factor authentication. Documents of this type that have been signed digitally as a result generally lack authority and legal force.

3. Advanced and Qualified Digital Signature

The most secure digital signature is Advanced & Qualified, which has the same legal value as a wet signature on document. Advanced and qualified digital signatures maybe created with the use of public key infrastructure and asymmetric cryptography technology. Advanced and qualified digital signatures can indicate when, where, and what devices to use throughout the document signing procedure. It is also simple to track any modifications made to the document after it has been signed.

 

The procedure used to confirm the user’s identification by this digital signature service provider makes it even unique. It also provides the two-step verification.  The manner of authentication employed varies as well, from mobile phone biometric scanning to SMS transmission of one-time passwords. Documents signed using digital signatures are included in this category since they already have an electronic certificate that is specifically linked to the signatory’s identity.

Categories of digital signatures

Digital signature certificates (DSCs) can be classified into three groups:

 

Class 1: They are only specific certification on an email ID and username, so they cannot be used for official business documents. Class 1 signatures offer a fundamental level of security and are applied in situations where there is little risk of data compromise.

 

Class 2: This is frequently used for the electronic filing (e-filing) of tax papers, such as returns for both the Goods and Services Tax (GST) and income taxes. Class 2 digital signatures check the identity of the signer against a database that has already been confirmed.  Class 2 signature are used in contexts with minimal risks and effects of data compromise.

 

Class 3: The highest level of digital signatures, Class 3 requires the signer to present themselves before a certification authority to verify their identity. Class 3 digital signatures are used in e-auctions, e-tendering, e-ticketing, court filings, and other contexts where there are significant risks to data or consequences from a security breach.

Importance of a Digital Signature 

A digital signature is required to ensure that the data or message being sent is legitimate. It is more trustworthy than receiving plaintext. Data integrity, message authentication, and message non-repudiation are all provided by digital signature. When the user verifies the digital signature using a public key that has been supplied by the originator, it helps to offer message authentication and ensures that the message is authentic and does not contain malware.

How to create a Digital Signature?

A one-way hash of the data to be signed and signing software can be used to establish a digital signature. The value of hash encryption, also known as the hashing algorithm, when combined with additional information is the generation of a digital signature.

As the hash function turns the random input to a defined number that is often shorter and helps in saving time and effort, it helps encrypt only the one hash value rather than the entire text.

 

 

The hash value is unique, and even a single digit modification in the data will generate a different value. This helps in authenticating the data and determining its authenticity for the recipient. After encryption, if the hash value still matches, the data is valid. The data has been altered if the hashes don’t match.

 

Suggested Read: How to register DSC on new Income Tax Portal?

Conclusion

The digital signature maybe used in a variety of ways, including electronically signing documents, certificates, emails, and messages, or it can be generated by a machine.   To make sure that the data received at the receiver end is only real and from the real owner.

Team Ebizfiling

Ebizfiling.com is a leading online platform offering end-to-end business compliance solutions for startups, SMEs, and global companies. With a presence across India and international markets including the USA, UK, and Singapore, the company specializes in company/LLP incorporation, ITR and GST filings, legal advisory, and foreign subsidiary formation. Backed by experienced professionals including CAs, CSs, and legal experts, Ebizfiling delivers accurate, timely, and regulation-compliant services trusted by thousands of businesses. The platform aims to simplify complex compliance processes through technology, personalized support, and a deep understanding of Indian and global regulatory frameworks.

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