DSC Management Utility User Manual for Income Tax Efiling

Taxpayers have recently reported that they have faced problems in using the Digital Signature Certificate for Signing through browser at the time of uploading their Income Tax Return. This is because the latest browser versions have started disabling the standard way in which browser support plug-in functions to address security. Hence Java applet that was used by the e-Filing website would not work in the latest versions of Google Chrome, Mozilla

How to Form an LLP in India

Step wise Registration Process for Limited Liability Partnership (LLP)

Recently most entrepreneurs have started opting for Limited Liability Partnership, considering it has most positive features of Partnership and Companies. It is hybrid form which incorporates benefits of both partnership and companies. It has the following features:

·         The liability of each partner is limited to the contribution mention in agreement.

·         The cost of formation is limited.

·         Less restriction and compliance.

·         Separate Legal Entity

Following is Step wise Registration process for incorporation of Limited Liability Partnership (LLP)

Step 1) Obtain Designated Identification Number (DIN)

Every individual intending to be appointed as designated partner of a limited liability partnership has to make an application for allotment of Director Identification Number. MCA has vide its notification amended the limited liability partnership rules, 2009. Now instead of DPIN, every partner who will be appointed as designated partner , will need to apply for DIN and not DPIN.

There is a fixed fee of Rs 100 for this eForm and it can only be paid through online mode (credit card/ internet banking). There shall be no requirement for physical submission of the documents at the DIN cell. All the necessary documents shall need to be scanned and attached in the eForm and submitted online.

While filing DIN form ensure following:

·         Single alphabet is not allowed in field ‘first name’ and ‘last name’.

·         Prefixes like Mr. / Ms. / Kumari / Shri etc. are not acceptable.

·         The name should be filled exactly as given in the identity proof, including the spelling.

·         It is mandatory to attach photograph giving front view of the full face of the applicant.

·         Income tax PAN is mandatory for Indian nationals. Applicant’s name (first, middle and last name), applicant father’s name (first, middle and last name) and date of birth should be as per the income-tax PAN details.

·         Passport number is mandatory for foreign nationals.

·         Proof of Identity of applicant - In case of Indian nationals, Income-tax PAN is a mandatory requirement for proof of identity. In case of foreign nationals, passport is a mandatory requirement for proof of identity.

·         Proof of residence of applicant - Address proofs like passport, election (voter identity) card, ration card, driving license, electricity bill, telephone bill or bank account statement shall be attached and should be in the name of applicant only.

·         In case of Indian applicant, documents should not be older than 2 months from the date of filing of the form

·         In case of foreign applicant, address proof should not be older than 1 year from the date of filing of the eForm.

·         Affidavit need to made by the applicant as per Annexure - 1 of the DIN Rules on Stamp paper which shall be notarized

·         DIN application needs to be by signed professional

Submit the application form online. The system will generate a provisional DIN.

Step 2) Register Digital Signature of Designated Partner

Partner/Designated partner of LLP/proposed LLP, whose signatures are to be affixed on the e-forms has to obtain class 2 or class 3 Digital Signature Certificate (DSC) from any authorized certifying agency. Register Digital Signature of Designated Partner  on the website of Ministry of Corporate Affairs. Fill in the registration form. Fields marked * in the form are to be mandatorily filled. Upload digital signature certificate. On successful registration, system will give a message that you have been registered successfully.

Step 3) Filing of Form 1 for Name Availability

Free name search facility (of existing companies / LLPs) is available on MCA portal. The system will provide the list of similar/closely resembling names of existing companies/LLPs based on the search criteria filled up. Download and fill Form-1 for reservation of name and fill in the details. Select name of the proposed LLP (upto 6 choices can be indicated).  State the significance of the key or coined word in the proposed name in brief

Enter the details of the applicant. Select whether applicant is an ‘Individual as partner’ or ‘Nominee of a body corporate’. Enter DIN of the applicant. DIN should be an approved DIN. On clicking the Pre-Fill button, system will automatically display the name, present residential address, phone, mobile, fax and e-mail ID of the applicant. Any partner or designated partner in the proposed LLP may submit Form-1.

In case the Designated Partner is nominee of a body corporate, select the type of body corporate. Enter the corporate identity number (CIN) or foreign company registration number (FCRN) or Limited Liability Partnership Identification number (LLPIN) or Foreign Limited Liability Partnership Identification number (FLLPIN) or any other identification number, as applicable.

Details of minimum two designated partners of the proposed LLP, one of them must be a resident of India, is required to be filled in the application for reservation of name. Only individuals or nominees on behalf of the bodies corporate as partners can act as designated partners.

Ensure that correct details have been provided as the same shall be automatically pre-filled in Form 2 for incorporation of LLP. Append digital signatures and submit the e-form. Pay the necessary fee of Rs 200/- by credit card (master/visa).

Once the name is reserved  by the Registrar, log on to the portal and fill up Form-2 

Step 4) Filing of Form 2 for Incorporation and Subscription Document

Mention Total Number of Partners and Designated Partners. Fill up details of same. Enter the amount of proposed monetary value of partner’s contribution in figures and system will automatically display the amount in words. Attach details in respect of names of partners/ nominees/ witnesses and their signatures in the format as Subscribers' sheet attachment. Attach proof of register office address of LLP. An individual has to give prior consent to become a designated partner and LLP to file consent in format prescribed. Select the state and office of registrar in which registered office of the proposed LLP is to be situated.

In case the name includes banking, insurance, venture capital, mutual fund, stock exchange, Chartered Accountant, Company Secretary, Cost Accountant, Advocate, CA, CS, CWA, asset management, non banking financial, architect, merchant   bankers, chit fund, securitization and reconstruction etc, a copy of the in-principle approval of the regulatory authority or council governing concerned profession should be attached with Form 2

Pay the prescribed registration fee as per LLP Rules, based on the total monetary value of contribution of partners in the proposed LLP

On submission of complete documents the Registrar after satisfying himself about compliance with relevant provisions of the LLP Act will register the LLP and will issue a certificate of incorporation

Step 5) Drafting of LLP Agreement

LLP agreement has to be drafted line with LLP Act. It is not mandatory to file LLP agreement at the time of registration and same can be file within 30 days. Designated partners are responsible for doing all acts, matters and things that are required to be done for complying with the provisions of the LLP act. They are liable to all penalties imposed on the LLP. So it is very important to draft LLP agreement with professional help.

The following clauses are important to be incorporated in agreement:

·         Name, Object and Register Office of LLP

·         The initial Contribution of the LLP by Partners

·         Methodology of valuation of Non Monetary contribution

·         The net profits or losses sharing ratios

·         Detail of Designated Partners

·         Interest  payable on Capital Loan prescribed u/s. 40(b) of the Income-tax Act, 1961

·         Remuneration payable to the working partners or as prescribed u/s. 40(b) of the Income-tax Act, 1961

·         Mode of operation of Bank Accounts

·         Maintenance of Book of Accounts

·         Appointment of arbitrator

·         Rights and Duties of Partners

·         Rights and Duties of Designated Partners

·         Indemnity clause

·         Goodwill clause

·         Procedure for change in name

·         Procedure to appoint Auditor

·         Admission of New Partner

·         Meeting

·         Cessation of Existing Partners

·         Winding up of LLP

·         Amendments of LLP

·         Extent of Liability of LLP

·         Liability of  Partners in LLP

·         Ancillary or other business carried over by LLP

Step 6) Filing of Form 3 – LLP Agreement

The LLP agreement has to be uploaded. Once it gets approved all the formalities for registration gets completed.

BY : CA CHIRAG CHAUHAN

For any query you can write to Chirag@cachauhan.in . Before making any decisions do consult your Professional / tax advisor.  Author does not take any responsibility for misrepresentation or interpretation of act or rules. Neither the author nor the firm accepts any liability neither for the loss or damage of any kind arising out of information in this document nor for any action taken in reliance there on.

USB/E token now compulsory for Class2/Class3 DSCs in India!!

F.No. CCA/DC (T)/2013-98 (pt.) Government of India

Ministry of Communications & Information Technology

Department of Electronics & Information Technology

Office of Controller of Certifying Authorities

New Delhi

25^th October 2013

OFFICE ORDER

The Security of Private Keys Corresponding to the DSCs being issued by Certifying Authorities (CA) to subscribers has always been matter of concern. In this regard the Certificate policy pertaining to India PKI lays down the technical security controls for the key pair generation and installation (Section 6 of India PKI CP Version 1.1). Detailed instructions were also issued on vide our letter No. 13(2)/2009-CCA dated 23^rd September 2009covering guidelines for storage of Private Keys and the same has been reemphasized subsequently  in meeting held with the CAs (ref. minutes of meeting held with all CAs on 19^th October 2012 and 23^rd January 2013). The Compliance to this requirement is however not entirely satisfactory and it is imperative that procedures are put in place to ensure that no Class 2 or Class 3 DSCs are issued in cases where the key pair has  not  been generated on a FIPS 140-1/2 Level 2 validated Hardware Cryptographic Token.

CAs are advised to ensure that procedures to give effect to the above are immediately incorporated in the DSC issuance process (if not done yet) so that the Security of Private Keys used by subscribers is maintained.

In respect of Class 1 Certificate, in case the subscriber does not wish to procure a Cryptographic device, the corresponding risk should be made known to the subscriber and an undertaking taken from him/her to the effect that he/she is aware of the risks associated with storing private Key(s) on a device other than a FIPS 140-1/2 validated cryptographic module.

A Compliance to this should be reported to the Office of CCA within a month. This is being incorporated on the audit process.

Digital Signature / DSC FAQs for Income-tax Purpose

Questions along with Answers

1. What is a Digital Signature?
Answer: A digital signature authenticates electronic documents in a similar manner a handwritten signature authenticates printed documents. This signature cannot be forged and it asserts that a named person wrote or otherwise agreed to the document to which the signature is attached. The recipient of a digitally signed message can verify that the message originated from the person whose signature is attached to the document and that the message has not been altered either intentionally or accidentally since it was signed. Also, the signer of a document cannot later disown it by claiming that the signature was forged. In other words, digital signatures enable the "authentication" and "non-repudiation" of digital messages, assuring the recipient of a digital message of both the identity of the sender and the integrity of the message. A digital signature is issued by a Certification Authority (CA) and is signed with the CA's private key. A digital signature typically contains the: Owner's public key, the Owner's name, Expiration date of the public key, the Name of the issuer (the CA that issued the Digital ID), Serial number of the digital signature, and the digital signature of the issuer. Digital signatures deploy the Public Key Infrastructure (PKI) technology. If you file electronically using digital signature you do not have to submit a physical copy of the ITR-V (Acknowledgment). Even if you do not have a digital signature, you can still e-File the Income Tax Return. However, you must also physically submit the printed and duly signed ITR-V (Acknowledgment) of your e-Filed Income Tax Return.


2. How legal is a Digital signature?
Answer: India is one of the select band of nations that has the Digital Signature Legislation in place. This Act grants digital signatures that have been issued by a licensed Certifying Authority in India the same status as a physical signature. Digital Signature Certificate deploys the Public Key Infrastructure (PKI) technology.


3. If a taxpayer does not have a Digital Signature, does this mean he/she cannot file the return online?
Answer: For non-auditable cases, DSC is not mandatory. If the DSC is used to the Income Tax Return (ITR), the ITR will be treated as legally filed immediately after uploading. However in case, a taxpayer does not have a DSC, he/she can still file the return electronically, but, in this case, a signed copy of ITR-V has to be sent to CPC, Post Bag No.1, Electronic City post office, Bangalore - 560100 within 120 days. After receiving the signed copy of ITR-V at ITD CPC, return will be treated as legally filed and will be processed.


4. How and where can I get a Digital Signature Certificate (DSC)?
Answer: The Information Technology Act, 2000 provides for use of Digital Signatures on the documents submitted in electronic form in order to ensure the security and authenticity of the documents filed electronically. Certification Agencies are appointed by the office of the Controller of Certification Agencies (CCA) under the provisions of IT Act, 2000. There are a total of eight Certification Agencies authorized by the CCA to issue the Digital Signature Certificates. They are listed as below:
Name of Certifying Agency
Website
Address
(n)Code Solutions Ltd., (A division of Gujarat Narmada Valley Fertilisers Company Ltd.)
http://www.ncodesolutions.com/
(n)Code Solutions, (A division of GNFC Ltd.) 301, GNFC Infotower, S G Highway, Ahmedabad 380054. marketing@ncodesolutions.com +91 79 40007300
e-Mudhra CA
http://www.e-mudhra.com/
M/S 3i Infotech Consumer Services Ltd., 3rd Floor, Sai Arcade, Outer Ring Road,Devarabeesanahalli, Bangalore 560036, Karnataka, India , Phone:+91 80 67821616 , Fax: +91 80 67175306 , Email:info@e-mudhra.com
Institute for Development & Research in Banking Technology (IDRBT)
http://idrbtca.org.in/
IDRBT, Castle Hills, Road No.1, Masab Tank, Hyderabad, Andhra Pradesh 500 057 (India)
MTNL
http://www.mtnltrustline.com/
3rd Floor, Mahanagar Doorsanchar Sadan, 9, CGO Complex, Lodi Road, New Delhi 110003
National Informatics Centre
http://www.nic.in/
A Block CGO Complex, Lodhi Road,New Delhi 110 003
Safescrypt
http://www.safescrypt.com/
Safescrypt Ltd. II Floor, Tidel Park 4 Canal Bank Road Taramani, Chennai Tamilnadu 600113
Tata Consultancy Services Ltd.
http://www.tcs-ca.tcs.co.in/
Tata Consultancy Services Ltd. 11th Floor, Air India Building, Nariman Point, Mumbai 400 021
For further details, visit http://cca.gov.in/rw/pages/faqs.en.do#igetadigitalsignaturecertificate


5. I already have a Digital Signature Certificate? Do I need a separate Digital Signature Certificate for e-Filing?
Answer: A person who already has the specified class II or III DSC for any other application can use the same for filing the Income Tax Return and is not required to obtain a fresh PAN embedded DSC. Fresh PAN embedded DSC is required in cases where the existing DSC has expired OR revoked.


6. How much does a digital signature cost?
Answer: The Digital Signature certificates are typically issued with one year validity and two year validity. It includes the cost of medium (a USB token which is a one time cost), the cost of issuance of Digital Signature and the renewal cost after the period of validity. The issuance costs in respect of each Certification Agency vary and are market driven.


7. How can a DSC be attached with the return while uploading?
Answer: The website allows the assessee to use Digital Signature Certificate as an option. Therefore, it is not possible to embed the DSC feature in the software utility /form. However, the assessee can browse and attach the Digital Signature Certificate at the time of submission of the Income Tax Return. Taxpayer has to first register his/her DSC on the e-filing website - either during Registration OR post LOGIN → Profile Settings → Register Digital Signature Certificate. Once DSC is registered, taxpayer has to use the same DSC while uploading the Income Tax Return.


8. The Web site accepts DSC in the .pfx format. Other formats like .cer are not being accepted. Can USB token based DSC be used to file the return?
Answer: DSC in USB token is also accepted.


9. It is not clear what class of DSC should be used while filing the return ?
Answer: DSC should be of Class II or III only, issued by CCA approved certifying agencies in India.


10. Whose DSC to be used for e-Filing Income Tax Return for Company / Firm / HUF?
Answer: In case, the e-Filing is being signed digitally using a Digital Signature Certificate, then the Digital Signature Certificate should be that of the Principal Contact assigned during registration OR the Principal Contact updated in 'Profile settings' → 'Change Principal Contact details'.


11. I am unable to register DSC in the ITD e-filing website?
Answer: Kindly try again with the correct details. If problem persists, contact Customer care at 1800-180-1861. You can also go through the Trouble shooting section where the possible solution is listed.


12. When I upload my return with DSC, I get the error 'fake path and can't read the file'. Why is it so?
Answer: Please do the following settings: Internet explorer → Tools →Internal Option → Security → reset the setting to medium high, close and reopen the Internet Explorer. OR Create a folder called 'fakepath' in your C drive and store the XML in the folder. On BROWSE, select this file and upload.


13. While registering my DSC, an error appears on the screen as "The Digital Signature Certificate is already registered". What should I do?
Answer: A DSC can not be registered by multiple users. When this error appears, it maybe that the DSC you are trying to register belongs to someone else. Please make sure that the DSC you are registering belongs to you and has your PAN and e-mail ID encrypted. The only exception for this rule is that an authorized signatory (principal contact) for an organization should register his/her own DSC to e-File for the organization. The same DSC can be used for personal e-Filing too.


14. While registering my DSC, an error appears on the screen as "The PAN mentioned in the Digital Signature Certificate does not match. Please retry.". What should I do?
Answer: The PAN in the Digital Signature Certificate does not match with your registered PAN. You should contact the Certificate Provider and get the PAN in your Digital Signature Certificate checked.


15. While registering my DSC, an error appears on the screen as "Validity of the Digital Signature Certificate has expired. Please update a valid Digital Signature Certificate". What should I do?
Answer: The validity period of the Digital Signature Certificate has ended. Attain a new Digital Signature Certificate from the Certified Service Providers and then register.


16. While registering my DSC, an error appears on the screen as "Invalid Digital Signature Certificate. Please contact your Certificate Provider". What should I do?
Answer: This could be due to the below reasons: 1. Digital Signature Certificate is revoked. 2. Digital Signature Certificate is not Level 2 or above. Only Level 2 or above Digital Certificates can be registered on e-Filing website. In this case, you should contact the Certificate Provider and get your Digital Signature Certificate checked.