1) under section 3 of IT act any subscriber may authenticate an electronic record by affixing his digital signature.

2) Section 4 made the provision for Legal recognition of electronic records — where any law provides that information or any other matter shall be in writing, typewritten or printed form then not-withstanding anything contained in such law, given requirement shall be deemed to have been satisfied if such information or matter is—

(a) rendered or made available in an electronic form; and

(b) accessible so as to be usable for a subsequent reference

3) Section 5 Legal recognition of [electronic signatures] — where law provides that information or any other matter shall be authenticated by affixing the signature or any document should be signed or bear the signature of any person then, notwithstanding anything contained in such law, such requirement shall be deemed to have been satisfied, if such information or matter is authenticated by means of [electronic signatures] affixed in such manner as may be prescribed by the Central Government.

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. This is the only secure and authentic way that a document can be submitted electronically

2) 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 seven Certification Agencies authorised by the CCA to issue the Digital Signature Certificates (DSCs).

3) The DSCs are typically issued with one year validity and two year validity. These are renewable on expiry of the period of initial issue.

4) A Digital Signature Certificate (DSC) Certificate authenticates your identity electronically. DSC also provides you with a high level of security for your online transactions by ensuring absolute privacy of the information exchanged using a Digital Signature Certificate (DSC). You can use certificates to sign / encrypt information such that only the intended recipient can read it. You can digitally sign information to assure the recipient that it has not been changed in transit, and also verify your identity as the sender of the message.

Digital signatures have been accepted after the enactment of Information Technology Act in India and carries the same legal character and force as a signature in ink on a piece of paper. A digital signature can be used only if you hold a digital certificate.

How digital signatures work

Digital signatures are based on public key cryptography, also known as asymmetric cryptography. Using a public key algorithm such as RSA, one can generate two keys that are mathematically linked: one private and one public. To create a digital signature, signing software (such as an email program) creates a one-way hash of the electronic data to be signed. The private key is then used to encrypt the hash. The encrypted hash -- along with other information, such as the hashing algorithm -- is the digital signature.

Your question is about using a stylus on a document electronically. This may not be considered as digital signature.

So you are saying if someone signs electronically using a stylus on a document, it isn't valid in India.

We can sign only using digital certificates, provided by the govt ?

Your understanding is right, the detailed form of electronic signature has been given above.