What is the Difference Between Class 2 and Class 3 DSC?

“Digital trust is the new currency of the online world.” You experience it every time you file taxes, submit business documents, or bid for government tenders. A Digital Signature Certificate (DSC) builds that trust. It serves as your secure digital identity, protecting your documents from tampering. Understanding the difference between Class 2 and Class 3 digital signature certificates helps you choose the right security level.

This blog explains how Class 2 and Class 3 DSCs work, recent regulatory changes, and the purpose of using them. It also shows why Class 3 has become the preferred option for most online processes. By the end, you will know exactly which DSC fits your needs and how to choose it confidently.

What are the Different Classes of DSCs?

Digital Signature Certificates in India come in different “classes,” based on the level of identity verification and security. The Controller of Certifying Authorities (CCA) defines these classes and sets their guidelines.

Historically, India had three classes of DSCs:

• Class 1 DSC verified only basic user details, such as name and email. It offered the lowest level of security.
• Class 2 DSC verified the user’s identity using government-issued documents, such as PAN and Aadhaar. It worked for filings, registrations, and general online authentication.
• Class 3 DSC offered the highest security. It required strict verification and supported high-risk activities, such as e-tendering and e-procurement.

However, the system has changed. The CCA has phased out Class 1 and Class 2 in January 2021 for most official purposes. This shift was a part of a nationwide upgrade to strengthen digital security and reduce the risk of misuse. These older classes used moderate verification methods, which were no longer sufficient for modern high-risk portals.

Class 3 now serves as the standard for nearly all secure government and business transactions.

1. Class 1 DSC

Class 1 DSC verified basic user details, such as name and email. It provided the lowest level of security and worked for minimal authentication tasks. The CCA discontinued this DSC in January 2021 to strengthen digital security across high-risk online portals.

2. Class 2 DSC

Class 2 DSC verified the identity of individuals or businesses using PAN, Aadhaar, and other government documents. It provided moderate security for routine compliance tasks. The CCA discontinued Class 2 DSC on 1 January 2021. Existing certificates remained valid until expiry, after which users had to shift to Class 3 DSC.

3. Class 3 DSC

Class 3 DSC verifies identities using strict Aadhaar e-KYC, document checks, and mandatory video verification. It provides the highest security and supports both low- and high-risk online transactions, including e-tendering, MCA filings, GST, and income tax submissions. 

Class 3 DSC now serves as the standard DSC for all secure government and business activities in India.

Key Differences Between Class 2 and Class 3 DSCs

Class 2 and Class 3 DSCs served different security needs, verification levels, and use cases. Understanding Class 3 vs Class 2 DSC differences helps users choose the right certificate.

Feature	Class 2 DSC	Class 3 DSC
Purpose / Use Cases	Basic and moderate-risk online filings such as ITR, MCA, GST, PF, ESIC, and trademark filing	High-security and high-value transactions, including e-tendering, e-procurement, DGFT, ICEGATE, MCA, GST, and audits
Verification / KYC	Database-based verification using PAN, Aadhaar, and OTP; occasional video verification	Strict verification with Aadhaar e-KYC, document checks, and mandatory video verification
Security Level / Encryption	Moderate encryption, suitable for low-risk portals	Highest encryption, suitable for both low- and high-risk portals
Storage / Token	USB token or software-based storage	USB token or hardware-based secure storage
Accepted Portals	MCA, Income Tax, GST, PF, ESIC, trademark portals	All government and high-security portals, including e-tendering, e-auctions, ICEGATE, and DGFT
Cost	Lower cost, affordable for routine compliance	Higher cost due to advanced security and strict verification
Validity & Renewal	Usually 1–2 years; cannot renew after expiry (discontinued since 1 Jan 2021)	1–3 years; renewable before expiry; currently issued and valid
Legal Validity / Implications	Legally valid when issued, but phased out; cannot be used after expiry	Legally recognized under the IT Act, 2000, it ensures enforceable signatures for all secure digital transactions
User Base	Individuals and organizations performing routine compliance	Individuals, organizations, vendors, professionals, and anyone accessing secure online systems
Risk / Misuse	Higher risk due to moderate verification	Very low risk due to strict verification and identity checks

These differences make Class 3 DSC the only reliable and future-ready option for all secure digital filings and high-value online transactions in India.

Which Digital Signature Certificate Do You Need Today?

With Class 2 DSC discontinued, Class 3 DSC has become the standard for all digital authentication needs in India. The right certificate depends on your role and the type of tasks you handle.

1. For Individuals

If you file Income Tax returns, submit GST forms, or handle MCA, PF, or ESIC filings, you need a Class 3 DSC. It ensures secure authentication and legal validity of your digital signatures. Without it, you cannot access these portals or submit official documents online.

2. For Businesses

Companies participating in e-tendering, e-procurement, or online bidding must use a Class 3 DSC. This certificate offers the security and verification needed for high-value transactions and government portals. All business filings and contracts now rely on Class 3 signatures for legal compliance.

3. For Professionals

Chartered accountants, company secretaries, tax consultants, and other professionals must use Class 3 DSC. It helps them file client returns, handle MCA documents, and manage secure business approvals. Class 3 DSC builds trust and reduces the chance of rejection on official platforms.

How to Apply for a Class 3 DSC?

Applying for a Class 3 DSC is simple if you follow the correct steps:

1. Choose a provider: Select a trusted Certifying Authority or service like RegisterKaro.
2. Fill the application: Complete the online DSC application form with accurate personal or business details.
3. Upload documents: Submit identity proof (PAN, Aadhaar), address proof, and any business documents if applicable.
4. Complete verification: Finish Aadhaar e-KYC, OTP confirmation, or live video verification as required.
5. Receive the token: After approval, receive the USB token or secure software-based DSC.
6. Install DSC: Follow instructions to install the DSC on your computer or browser.

Renew your Class 3 DSC before it expires to maintain access to all portals. Submit updated documents if needed and complete e-KYC or video verification. Once approved, you receive the renewed token or certificate. 

Tips for Smooth Application

• Complete the video KYC carefully to avoid delays.
• Ensure all documents are valid and legible.
• Apply well before deadlines for MCA, GST, or tax filings.
• Avoid mistakes in personal or company details, which may cause rejection.

Final Thoughts

Class 3 DSC now serves as the standard for all digital signatures in India. It offers strong security, legal validity, and broad acceptance across government and business portals. Understanding DSC Class 2 and Class 3 differences helps users make the right choice. Whether you are an individual, business, or professional, using a Class 3 DSC ensures safe, reliable, and legally recognized online transactions.

---

Frequently Asked Questions (FAQs)

1. What is a Digital Signature Certificate (DSC)?

A Digital Signature Certificate (DSC) is an electronic proof of identity used to sign documents digitally. It ensures data integrity, authentication, and non-repudiation. DSCs are mandatory for filing Income Tax, GST, MCA forms, and participating in e-tendering or online bidding in India.

2. What are the different classes of DSC?

There are three types of Digital Signature Certificate (DSC) in India: Class 1, Class 2, and Class 3. Class 1 provides basic authentication, Class 2 serves moderate security needs, and Class 3 offers high security for sensitive or high-value transactions. Class 3 is now the standard for all government and business portals.

3. What is the difference between DSC Class 2 and Class 3?

The difference between DSC Class 2 vs Class 3 lies in verification, security, and use cases. Class 2 used database-based checks for routine compliance, while Class 3 DSC uses strict Aadhaar e-KYC, document, and video verification for high-risk transactions, including e-tendering, MCA filings, and secure government portals.

4. Who needs a Class 3 DSC today?

Individuals filing ITR, GST, or MCA forms, businesses participating in e-tendering or e-procurement, and professionals like CAs or company secretaries all require a Class 3 DSC. Class 3 now handles both low-risk and high-security tasks after the discontinuation of Class 2 DSC.

5. What is the main difference between Class 2 and Class 3 DSC?

The main difference between Class 2 and Class 3 DSC lies in security and verification. Class 2 used simple database checks for routine filings, while Class 3 requires strict Aadhaar e-KYC, document validation, and video verification. Class 3 supports high-risk activities like e-tendering and is now the only valid DSC class issued in India.

6. Is Class 2 DSC still valid in India?

No, Class 2 DSC is no longer valid in India. The Controller of Certifying Authorities (CCA) discontinued its issuance on 1 January 2021. Existing certificates remained usable only until expiry. After that, all individuals, companies, and professionals must switch to Class 3 DSC for tax filings, MCA forms, GST, and e-tendering.

7. Which DSC is required for e-tendering?

E-tendering requires a Class 3 DSC because it offers the highest security, strict KYC verification, and legal validity under the IT Act, 2000. Government portals mandate Class 3 signatures to ensure bidder authenticity and prevent fraud. All vendors, contractors, and companies participating in procurement must use a Class 3 DSC.

8. Can I renew my Class 2 DSC?

No, you cannot renew a Class 2 DSC after expiry. The CCA discontinued Class 2 issuance and renewal from January 2021. Users must apply for a Class 3 DSC instead. Class 3 covers all former Class 2 use cases and offers stronger security, broader acceptance, and mandatory compliance for government platforms.

9. Why did India discontinue Class 2 DSC?

India discontinued Class 2 DSC to strengthen digital security and reduce misuse. Class 2 relied on moderate verification, making it more vulnerable. Class 3 provides stricter Aadhaar e-KYC, document checks, and video verification. To create a unified and safer system, the CCA phased out Class 2 on 1 January 2021.

10. How much does a Class 3 DSC cost in India?

A Class 3 DSC typically costs between Rs. 900 and Rs. 2,500, depending on validity (1, 2, or 3 years), whether it is individual or organizational, and the Certifying Authority issuing it. Prices also vary based on USB token requirements. Despite higher costs than Class 2, it offers stronger security and wider acceptance.

11. Is Class 2 DSC still valid?

No. The CCA discontinued Class 2 DSCs from 1 January 2021. Existing certificates remained valid until expiry, but could not be renewed. All users must now shift to Class 3 DSC for continued access to MCA, GST, tax, and e-tendering portals.

12. How is DSC Class 3 verified?

DSC Class 3 verification includes Aadhaar e-KYC using OTP or biometric authentication, document validation, and mandatory live video verification. Certifying Authorities cross-check all data with government records, ensuring the highest level of trust for secure and legally recognized online transactions.

13. Can Class 3 DSC be used for tasks earlier done with Class 2 DSC?

Yes. After the discontinuation of Class 2 DSC, Class 3 DSC now serves both low-risk and high-security functions. Users can perform routine filings like ITR, GST, and MCA submissions while also participating in e-tendering or other high-value digital transactions.

14. Can a Class 3 DSC be used on multiple devices?

Yes, a Class 3 DSC can be used on multiple devices, but it depends on the type of token provided. USB hardware tokens usually work on one device at a time, while software-based DSCs can be installed on multiple systems. Always follow the Certifying Authority’s instructions to ensure security and avoid misuse.

15. How long is a Class 3 DSC valid?

Class 3 DSC is typically valid for 1 to 3 years. Users must renew it before expiry to maintain uninterrupted access to government and business portals. Renewal requires updated documents and re-verification, ensuring the certificate remains legally valid and secure for all online tasks.

16. What happens if you don’t have a Class 3 DSC?

Without a Class 3 DSC, individuals and businesses cannot file ITR, GST, or MCA forms digitally. They also cannot participate in e-tendering, online bidding, or access high-security government portals. Class 3 DSC is now mandatory for almost all legally recognized digital transactions in India.