DIFFERENCE BETWEEN AADHAAR-BASED ESIGN & DSC

Signing documents has changed!

What once required printing, scanning, and couriering can now be done in seconds. In India, digital signatures are legally recognized under the Information Technology Act, 2000, making online documentation secure and valid.

But here's where many people get confused —Aadhaar-based eSign and DSC are not the same.

Both let you sign documents digitally.

Both are legally valid.

But the way they work, the setup process, cost, and use cases are completely different.

If you're unsure which one is right for you, this guide will break it down in the simplest way possible.

Buy Aadhaar-based eSign solutions and DSC from a single trusted platform — esign.network!

What is Aadhaar-based eSign?

Aadhaar-based eSign is an electronic signature service that allows individuals to sign documents online. Instead of using a physical USB token, the identity of the signer is verified digitally through Aadhaar authentication.

The authentication is done using different methods of verification linked to Aadhaar. Once verified, an electronic signature is generated instantly to sign the document.

It's quick, paperless, and designed for real-time digital transactions.

Key Features

Here are the features of eSign:

- No physical USB token required

- Instant signing through OTP or biometric verification

- Fully online process

- Legally valid under the Information Technology Act, 2000

- Ideal for one-time or occasional document signing

Use Cases

Aadhaar-based eSign is commonly used for:

- Online agreements

- Loan and fintech documentation

- Employee onboarding forms

- Vendor contracts

- KYC-related documentation

- Any service agreements

- GST registrations for Individuals / Proprietorships / Partnerships

Different Modes of eSign

1. Aadhaar OTP

Authentication is completed using a One-Time Password sent to the mobile number linked with Aadhaar.

2. Aadhaar Biometric (Fingerprint)

The signer verifies identity using a registered fingerprint device connected to the system.

3. Aadhaar Face Authentication

Identity is verified through face authentication using Aadhaar-based facial recognition.

4. Aadhaar Iris

Authentication is done through iris scan.

What is a DSC or Digital Signature Certificate?

A Digital Signature Certificate (DSC) is issued to a person or organization to sign documents electronically.

To sign a document, the user must insert the token into their system and enter a password.

DSC is legally valid under the Information Technology Act, 2000 and is issued by licensed Certifying Authorities regulated by the Controller of Certifying Authorities.

Key Features

- Stored in a USB cryptographic token

- Password-protected

- Valid for 1 to 3 years

- Required for many government and compliance portals

- Provides higher signing assurance

Use Cases

DSC is commonly required for:

- MCA filings

- GST filings and registration (mandatory for companies & LLPs)

- Income Tax filings for companies

- e-Tendering

- Trademark and patent filings

- DGFT transactions and more

Types of DSC

Use: Signing, Encryption, Combination of Signing & Encryption

Profile: Individual, Organization, Foreign Individual, Foreign Organization

Class: Class 1, Class 2, Class 3

Portal: DGFT (for Directorate General of Foreign Trade), ICEGATE (for Indian Customs Electronic Gateway), or Multi-purpose (usable across multiple government portals)

Key Differences Between Aadhaar eSign & DSC

Although both Aadhaar-based eSign and DSC might sound confusing, they differ in structure, usage, and purpose. Here is the basic difference:

1. Authentication Method

Aadhaar eSign works through Aadhaar authentication using OTP, biometric, face, or iris verification.

DSC works through a cryptographic key stored inside a password-protected USB token.

2. Hardware Requirement

eSign does not require any physical device. Everything happens online.

DSC requires a USB token that must be inserted into the system while signing.

3. Validity Period

eSign is transaction-based. It is generated and used only for that specific signing event.

DSC is issued for a fixed period, usually 1 to 3 years.

4. Setup Process

eSign is instant and can be used immediately without prior installation.

DSC requires application, identity verification, and issuance before it can be used.

5. Usage Scope

eSign is ideal for quick agreements, onboarding documents, and occasional filings.

DSC is commonly required for compliance-heavy portals such as MCA, GST (for companies & LLPs), e-tendering, and DGFT.

6. Control & Ownership

In eSign, the signature is generated at the time of signing and not stored with the user.

In DSC, the signing key is securely stored in the USB token and remains under the user's control during its validity.

7. Cost Structure

eSign generally works on a pay-per-use basis.

DSC involves a one-time fee for the validity period.

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Final Words

Aadhaar-based eSign and DSC are both valid digital signing solutions TO electronically sign documents in India, but they are built for different needs.

The key is simple! Choose based on your usage frequency and compliance requirements.

FAQ

1. Is Aadhaar-based eSign legally valid in India?

Yes. Aadhaar-based eSign is legally valid under the Information Technology Act, 2000. Documents signed using eSign are legally enforceable, provided the authentication process is properly completed.

2. Is DSC legally valid under the IT Act 2000?

Yes. A Digital Signature Certificate (DSC) is legally recognized under the Information Technology Act, 2000. In fact, DSC is one of the primary forms of secure digital signatures defined under the Act.

3. Can I file ITR without DSC using eSign?

Yes, individuals can file Income Tax Returns using Aadhaar OTP (eSign) instead of DSC. However, companies and certain entities are required to file using DSC.

4. Is DSC mandatory for GST registration?

For companies and LLPs, DSC is mandatory on the GST portal.

For individuals and proprietorships, Aadhaar OTP (eSign) can be used instead.

5. What is the validity of a DSC?

A DSC is typically issued for 1 to 3 years. After expiry, it must be renewed.

6. Does eSign require a USB token?

No. Aadhaar-based eSign does not require any hardware or USB token. The entire process is completed online.

7. Which is more secure: Aadhaar eSign or DSC?

Both are secure but operate differently.

Aadhaar eSign relies on Aadhaar-based authentication for each transaction.

DSC uses a cryptographic key stored in a password-protected USB token, offering strong control for compliance-heavy usage.
The better option depends on your specific requirements.