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Digital Signature

A digital signature is a mathematical algorithm used to verify the authenticity of electronic messages and documents, functioning as a modern alternative to traditional signatures. It relies on public-key cryptography and is supported by digital signature certificates (DSC) that validate the identity of the signer. Digital signatures offer advantages such as security, legal validity, and efficiency, while also having certain disadvantages like expiration and compatibility issues.

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10 views6 pages

Digital Signature

A digital signature is a mathematical algorithm used to verify the authenticity of electronic messages and documents, functioning as a modern alternative to traditional signatures. It relies on public-key cryptography and is supported by digital signature certificates (DSC) that validate the identity of the signer. Digital signatures offer advantages such as security, legal validity, and efficiency, while also having certain disadvantages like expiration and compatibility issues.

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Digital Signature

• A digital signature is defined in Section 2(1)(p) of the Information Technology


Act,2000. A digital signature is a mathematical algorithm that is regularly used
to validate the originality and if the message is true and genuine.
• A digital signature is a computerized fingerprint that is distinct to a person or
independent organization and it is used to protect the information in the digital
message or document.
• In the case of emails, the email itself becomes part of the digital signature. In
simple words, a digital signature is a present-day alternative to the traditional
way of signing documents on paper with ink.

A digital signature is a kind of electronic signature that is used to verify the name of
the sender of a message or the signer of a document. It makes sure that the
document or message is genuine and the documents that are sent are untouched.
Digital signature gives 2 algorithms.

1. Private key or user secret key


2. Verifying signature that includes the user’s public key. The output of the
signature process is called the digital signature.

Under Information Technology it is relevant to describe the basis of cryptography. So,


public-key cryptography is the method accepted by the IT Act to protect any
computerized document. Public key cryptography is the creation of cryptography that
permits users to exchange without any danger to access shared secret keys.

Authentication using Digital Signature

• The verification of electronic records is done by creating a digital signature


that is a mathematical expression of subject matter in a message.
• Cryptography secures the privacy of data by replacing it with a changed
version that can be redone to reveal the original data only to someone who
has the proper key.

A key is an arrangement that manages the operation of cryptographic transformation.


It involves 2 processes i.e., encryption and decryption.

• Encryption: The process of transforming the plain message into a cipher text.

• Decryption: The reversal of Cipher text into the original message.


Digital Signature Certificate

A digital signature certificate (DSC) is equal to a physical or paper certificate. DSC is a


procedure to show the authenticity of electronic documents. It is needed to be
presented electronically to show the identity, access information, or sign document
digitally. The Central Government has appointed the Controller of Certifying
Authority that will grant a license to the Certifying Authorities to issue DSC to the
user.

Types of Digital Signature Certificate

There are 3 types of digital signatures based on security level i.e. class 1, class 2, and
class 3 certificate.

• Class 1 certificate: It is not legally recognized. It is based on confirmation of


valid email and not direct verification.
• Class 2 certificate: This is based on the identification of the person that is
required to be verified against a reliable pre-verified database.
• Class 3 certificate: is a person in the presence of the Registration Authority
proves his identity.

Lastly, businesses in India are using digital signatures to sign documents like invoices,
reports, contracts, agreements, HR letters, and other such documents.

Features of Digital Signature

1. AUTHENTICATION

• It means that the digital signature will help the receiver to recognize who has
sent the message or authenticate the source of the message.

2. INTEGRITY

• It may be so that while sending the message the document may get altered in
this case the receiver will be able to know the originality of the message.

3. NON – REPUDIATION

• The sender cannot refuse that he did not send any message.
Advantages of Digital Signature

1) DIGITAL SIGNATURE ARE SECURE

• Digital signatures using cryptographic algorithms cannot be copied, unlike


handwritten signatures which can be forged and copied. Slightest, change to
a digitally signed document makes the signature invalid.

2. DIGITAL SIGNATURE ENSURES AUTHENTICATION

• It means that an electronic document signed will be legally valid, which


stands in court just like any other paper document.

3. DIGITAL SIGNATURE ENSURES NON-REPUDIATION

• The digital signature is created using a distinctive set of algorithms within a


digital certificate issued to the signer after doing analysis by Certifying
Authority. The signer is the true authorizer of his authentication (signature).

4. LEGALLY VALID IN MOST COUNTRIES

• A digital signature is legally valid in most of the countries that have laws on
e-signature. Though it recognizes electronic signature the need to have a
highly secure digital signature for signing an electronic document

5. COST EFFECTIVE AND EFFICIENT

• New businesses and governments are welcoming the concept of digitally


signing the document to make or have paperless transactions, with the
implementation of e-signature, the entire process has become convenient,
effective, has reduced the cost, and documents are secured.

6. TRACKING DIGITAL SIGNATURE DOCUMENT

• Any digital document that is digitally signed can be traced effortlessly and
located in a short time.

7. TIME -STAMPED OF DIGITAL SIGNATURE

• Time stamping will allow the digital signature to give a clear indication of
when the document was signed.
8. SPEED

• With e-signatures, it has become easy for the parties to sign any documents
with a digital signature, as they don’t have to wait for the paper document to
receive it from the courier. Any contract can be signed by the concerned
parties instantly no matter where they are geographical.

Disadvantages of Digital Signature

1. EXPIRE

• Just like any other electronic device or technology it’s based and dependent
on the technology. In times of rapid growth of sophisticated technology,
many such products have a short life.

2. SOFTWARE

• The sender and the recipient have to purchase the verification software for
the working of digital signature.

3. COMPATIBILITY

• The standards of digital signature are different and most of them are
contradictory to each other and create confusion while sharing digitally
signed documents.

Documents on Which Digital Signature is Valid

Certain documents need a notarial process or the documents are required to be a


physical signature. Some documents are also required to be registered by the
Registrar or sub-registrar to be legally enforceable.

• Negotiable instrument such as promissory note or bill of exchange other than


cheque.
• Trust deeds
• Power of attorney
• A Will and testamentary deposition
• Real estate contract (lease/ sales agreement)
Electronic Signature

The electronic signature or e- signature is equal to that of a handwritten Signature


under the Information Technology Act, 2000. Though there are few exceptions to it.
The act permits signing any document using e-signature. An e-signature must meet
certain conditions and it needs to be studied before it is used by any individual.

According to the US Federal ESIGN Act, electronic signatures are defined as:
“Electronic sound, symbol, or process, attached to or logically associated with a
contract or other record and executed or adopted by a person with the intent to sign
the record.”

Two types of E-signatures


1. Electronic signature joined with an Aadhar identity number with electronic
know -your- customer (e-KYC) method. It is also known as e-sign online
electronic signature service.
2. Digital signature is set up by an “asymmetric crypto-system and hash
function”. The signatory is given 1-2 years of digital ID which is stored on a
USD token, along with personal PIN to accent the document.

Additional conditions to be fulfilled for the two types of e-signature

1. The signatory e-signature must be unique. This particular condition is fulfilled


with certificate based digital ID.
2. The signatory should have access over the data used in creating the e-
signature at the time of signing.
3. Any changes made to the e-signature should be removable on any document
to which such e-signature is affixed.
4. All the financial records should be checked while signing.
5. Signer certificate will be issued by Certifying Authority (CA) identified by
Controller of Certifying Authorities appointed under the IT Act.

Validity of Electronic Signature


• Any person when signing a particular document with Electronic
signature his ID has to be linked.
• Electronic signature is based on an audit trail.
• The person should have control over the date created that is being made to
sign with an electronic signature.
Government’s Use of E-Signature

Authorities like the Ministry of Corporate Affairs, the Department of Revenue, and
the Ministry of Finance agree on electronic records authenticated using a digital
signature. When it comes to e-filing the mode which is agreed by the Ministry of
Corporate Affairs, income tax or service tax filing is digital signatures. The RBI has
permitted small finance banks and payment banks to depend on electronic
authentication for confirming the terms and conditions. It allows one-time PIN (OTP)
based eKYC for onboarding customers by all regulated entities, subject to certain
conditions.

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