How to Check if Your Form 16 Carries a Valid Digital Signature

Form 16 is a TDS certificate issued by the employer to its employees, providing information about the tax deducted from the employee’s salary by the employer. It is commonly issued in electronic form and contains a valid digital signature of the authorised signatory. In today’s digital world, a valid digital Signature provides authenticity, integrity and non-repudiation of electronic documents. It ensures both the employer and the employee that the information provided in Form 16 is legally valid, trusted, and not tampered with.

Form 16 and its Importance in Tax Documentation?

Form 16 is a TDS certificate that an employer issues to its employees. This certificate details the salary structure, the TDS deducted from salary, the standard deduction, the entertainment allowance, professional tax, income chargeable under the head of salary,  deductions under Chapter VI-A, taxable income, tax on total income, rebate under section 87A, surcharge (if applicable), health and education cess, Net taxable income or tax refund, arrears in salary. This information helps the taxpayers to file their Income Tax Return.

Employees receive a salary statement in Form 16 on an annual basis. Form 16 provides the break-up of your yearly salary and income tax calculations. We provide you with steps to check the authenticity of Form 16 by validating the digital signature.

What is a Digital Signature?

The Digital Signature is an encrypted code that is attached to the electronic document. It verifies the authenticity of the authorised signatory and ensures that the information contained in Form 16 is not altered.

Before moving forward with the digital signature, lets first understand about what the Public Key Infrastructure (PKI) is:

How Digital Signature Works

The digital signature uses two keys Private key and Public Key. Here, the process of how digital signature works is described below:

Encryption

The computer of the signatory uses the private key and generate the digital signature based on the content of the documents.

Decryption

The recipient's computer uses the public key to decrypt the signature and check for its validity.

Verification

When the decrypted data is matched with the document, the document is confirmed to be authentic and verified.

Why Should you Validate The Digital Signature on Form 16?

Your Form 16 is digitally signed by or on behalf of your employer. Employees should check the details of their salary, tax deductions and tax calculations. You should also check the form to make sure that the digital signature is validated and the form is authentic. The validation of a digital signature ensures that there is no tampering with the Form 16 after signing.

According to Archit Gupta, founder & CEO of Cleartax.com, a digital signature holds the same significance as a physical signature. It validates the Form 16 as a legal document and can be verified to ensure its authenticity. Validating the digital signature helps establish that it originates from a trusted source and has not been altered after signing. Therefore, verifying the digital signature adds an additional layer of assurance to confirm the authenticity of your Form 16.

How to Check The Validity of your Form 16?

Step 1:Open your Form 16 in Adobe reader. The digital signature is visible on the last page of Form 16.

Step 2:Right-click on the ‘Signature’ and choose ‘Validate Signature’. The document will display that the signature is valid and not modified after signing.

How to Validate The Digital Signature on your Form 16?

Step 1: Check the validity of the digital signature. In a case, the validation fails, the ‘Signature Validation Status’ will display that the validity is unknown. You will see the below information:

Step 2: You should perform further validations by clicking on ‘Signature Properties’, and then click on ‘Show Signer’s Certificate’. When you click on ‘Show Signer’s Certificate’, a certificate viewer window appears. In the ‘Summary’ tab, you can see the details of the digital signature. Further, in the ‘Details’ tab, you can view the details of the signer such as name and email address of the signer. You can also see the digital signature certifying authority. CCA India is the official certifying body for digital signatures in India.

Step 3: The CCA is not part of the list of digital certificates. You can add CCA India to your trusted list of digital certificates. You click on the tab ‘Trust’, and click on ‘Add to Trusted Certificates’. A security message will pop-up. Click ‘OK’, and next, it will open ‘Import Contact Settings’. Select ‘Use this certificate as a trusted root’. Please note that when you add the certificate to your trusted list, you should make sure that the ‘Certified Documents’ option is selected. Click on ‘OK’ and return to the ‘Certificate Viewer’ window. Now CCA India is part of your trusted certificates.

Step 4: Hence, you can re-validate the digital signature by returning to the ‘Signature Properties’ window. You can re-validate by clicking on the ‘Verify Certificate’ or ‘Validate Signature’ button. The digital signature is now valid. Click on ‘Close’ and your Form 16 validation is complete.

Regulation for Digital Signature

In India, digital signatures and their use in documents are regulated by the Information Technology Act, 2000.

Legal Validity and Acceptance

The legal acceptance of a digital signature means the documents are legally binding. This will help the taxpayers to streamline their process of filing the Income Tax return and manage financial records.

Common Validation Issues

The common validation issue that signatory may faces are as follows:

• Expiry of Digital Signature Certificate
• Alteration in the information in digital documents will not match the Digital Signature
• The details entered during the validation process do not match the Digital Signature Certificate