FLA Return i.e Foreign Liabilities and Assets (FLA) Return- An annual return submitted to the RBI that captures the outstanding foreign liabilities and foreign assets of Indian resident entities as on 31 March of the relevant financial year.
Purpose: The return enables the RBI to compile India's international investment position and monitor cross-border investment flows.
Who is Required to File?
An Indian resident entity is required to file the FLA Return if, at any time in the current or any previous financial year, it has:
- Received Foreign Direct Investment (FDI) in India; or
- Made Overseas Direct Investment (ODI) in a foreign entity,
and has outstanding foreign liabilities or foreign assets in its balance sheet as on 31 March. This requirement applies to:
- An Entity within the meaning of section 1(4) of the Companies Act, 2013.
- A Limited Liability Partnership (LLP) registered under the Limited Liability Partnership Act, 2008
- Others [include SEBI registered Alternative Investment Funds (AIFs), Partnership and Proprietary Firms, Public Private Partnerships (PPP) etc.]
Who is Not Required to File?
Generally, entities that have only:
- Foreign Portfolio Investment (FPI),
- External Commercial Borrowings (ECB), or
- No outstanding foreign assets or liabilities as on 31 March,
are not required to file the FLA Return solely on that basis. However, businesses should carefully evaluate their reporting obligations before concluding that filing is not required.
Due Date
The FLA Return is required to be filed annually on or before 15 July for the financial year ending on 31 March. RBI has extended the due date for FY 25-26 upto 31st July 2026.
If the audited financial statements are not available by the due date, the entity may submit the return based on unaudited financial statements and revise it later as soon as the audited financial statements are available.
Information Required
The return generally includes details such as:
- Foreign equity participation
- Outstanding foreign liabilities
- Overseas investments
- Financial information from the balance sheet
- Profit and loss details
- Investments in foreign subsidiaries, associates, and branches
- Details of foreign investors and ownership
The information reported should reconcile with the financial statements of the entity.
Mode of Filing
The FLA Return is filed online through the RBI's FLAIR (Foreign Liabilities and Assets Information Reporting) Portal. The portal allows eligible entities to register, validate data, and submit the annual return electronically.
Queries: All communication/queries should be sent to flareturn@rbi.org.in. (Earlier, communication email id: surveyfla@rbi.org.in has been changed to flareturn@rbi.org.in)
Consequences of Non-Compliance
The FLA Return is a statutory requirement under FEMA. Non-filing, delayed filing, or submission of incorrect information may attract penal provisions under FEMA, which can include monetary penalties and other regulatory consequences. Timely and accurate filing is therefore essential.
Conclusion
The FLA Return is more than just an annual compliance—it is an important reporting mechanism that helps the RBI assess India's external financial position. Any entity with outstanding foreign investments should carefully evaluate its applicability and ensure timely filing through the RBI's FLAIR portal. Maintaining accurate records and complying with FEMA reporting requirements not only avoids regulatory penalties but also strengthens the organization's overall compliance framework.