FLA Return Filing in India

What is the FLA return?

The annual return on Foreign Liabilities and Assets (FLA) is a statistical return notified under FEMA, 1999. It captures an entity’s foreign financial liabilities — investment that non-residents hold in it — and its foreign financial assets, meaning investment it holds abroad, measured at the end of March.

RBI uses the aggregated data to compile India’s Direct Investment Position and Portfolio Investment Position surveys conducted under the auspices of the IMF, and to build the balance of payments and international investment position. Entity-wise information is treated as confidential; only consolidated aggregates are published.

Because it is a survey rather than a transaction filing, the FLA return is not a substitute for reporting a specific investment. A company that took foreign money during the year files FC-GPR with RBI at the time, and then files the FLA return for that year as well.

Who has to file the FLA return?

Every Indian-resident entity with outstanding inward FDI or outward direct investment as at the end of March of the reporting year or the previous year is required to file. The form of the entity does not matter as much as the presence of a foreign asset or liability on its balance sheet.

• Companies within the meaning of section 1(4) of the Companies Act, 2013, including an Indian subsidiary of a foreign parent
• Limited liability partnerships registered under the LLP Act, 2008 that hold foreign capital contribution
• SEBI-registered Alternative Investment Funds
• Partnership firms and proprietary firms with foreign investment received or made
• Public private partnership entities
• Startups with a foreign angel, VC, or strategic investor on the cap table
• Indian companies that have made an overseas direct investment in a foreign entity
• Entities that still show foreign investment at 31 March even though the business is dormant

Entities regulated by the International Financial Services Centres Authority follow the instructions issued by IFSCA for FLA submission and are not required to file the return with RBI. An Indian entity investing into an IFSC entity, however, continues to report that outbound investment in its own FLA return.

Who does not need to file the FLA return?

• Entities with no outstanding inward or outward direct investment at end-March of either the reporting year or the previous year
• Entities that have received only share application money, with no outstanding FDI or ODI at end-March
• Entities whose non-resident holding is entirely on a non-repatriable basis, which is treated as domestic investment
• Entities holding only foreign portfolio investment with no direct investment relationship

The two-year reference point catches people. The return captures both the current March and the previous March, so an entity whose foreign shareholders sold out to residents during the year may still have to file for that year because a balance existed at the previous March.

What is the FLA return due date?

The FLA return is due by 15 July of the reporting year, covering the position as at 31 March immediately before. That date is stable and applies whether the entity’s accounts are audited by then or not.

RBI has on occasion extended the date for a particular year by notification, and it has also changed the official email address for FLA queries. Treat 15 July as the working deadline and check the current RBI advisory rather than relying on a previous year’s extension.

Can the FLA return be filed with unaudited accounts?

Yes. Where the accounts are not audited by 15 July, the entity files on the basis of provisional or unaudited financial statements within the due date. This is expressly permitted, and it is the correct approach — filing late with audited numbers is a contravention, filing on time with provisional numbers is not.

Once the audited financials are ready, the entity raises a request on the FLAIR portal for permission to submit a revised return and, on approval, files the revision. RBI expects the revision to follow as soon as audited statements are available, and asks for it irrespective of how small the variation is.

A practical consequence: close your books early enough that the provisional numbers are defensible. The variation report the portal generates between years is reviewed, and a large unexplained swing invites a query.

How do you register on the FLAIR portal?

1. 1.Open the FLAIR portal and choose registration for a new entity user
2. 2.Complete the FLA user registration form with entity, CIN or LLPIN, and authorised person details
3. 3.Upload the verification letter and the authority letter in the prescribed formats
4. 4.Submit the registration and wait for the user ID and default password to reach the authorised person’s email
5. 5.Log in, reset the password, and open the FLA return for the relevant year
6. 6.Complete each section, run the validation, and submit before the due date
7. 7.Save the acknowledgement generated by the portal for your compliance file

Entity details on FLAIR cannot be edited once registered. Changing the authorised person, email, or entity name requires the old account to be deactivated by writing to RBI and then re-registering — so nominate someone whose email will outlast the filing season, not a departing intern.

AIFs are handled differently. There is currently no online FLA format for an AIF, so an AIF registers on the portal and then writes to RBI for the prescribed spreadsheet format, which it completes and returns by email.

What information does the FLA return ask for?

The return is organised into sections that move from identity to financials to the detail of foreign holdings. Most of the inputs come straight from the balance sheet and the register of members; the rest come from your FEMA file.

• Entity identification — name, CIN or LLPIN, PAN, contact and NIC activity code
• Financial details — paid-up capital, reserves and surplus, sales and purchases, profit or loss, employee count
• Non-resident equity holding by country of the immediate investor, at both March reference dates
• Market value of non-resident equity, computed for unlisted entities on the own-funds-at-book-value basis
• Other capital with the direct investor — receivables from and payables to the foreign group
• Outward direct investment in each foreign entity, with country and holding percentage
• Portfolio investment liabilities and assets, where applicable
• Other foreign financial assets and liabilities such as trade credit, loans, and currency and deposits

Two reporting conventions matter. Foreign investment is reported by the country of the immediate investor, not the ultimate parent — though receivables and payables with an ultimate holding entity are reported under other capital. And purely domestic assets and liabilities are excluded even if they are denominated in foreign currency.

How is the value of foreign equity computed for an unlisted company?

Unlisted entities use the own funds at book value method the IMF prescribes. The market value of equity held by non-residents is the entity’s net worth multiplied by the non-resident holding percentage, taken separately for the current and previous March.

Net worth for this purpose is paid-up equity and participating preference share capital plus reserves and surplus, less accumulated losses. A loss-making startup can therefore report a foreign equity value far below the money actually invested, which is correct and expected — the return measures position, not cost.

For a listed entity the portal computes the figure itself from the closing share price at the reference date, so no separate calculation is needed.

How do you revise an FLA return?

A revised FLA return cannot simply be re-filed. The entity must first obtain RBI approval on the portal — typically by opening the year-enablement screen from the FLAIR menu, selecting the relevant year, and submitting the request. Only after approval does the year reopen for editing.

The same approval route is used to file a return for an earlier year that was never submitted. RBI allows previous years to be filed, but notes that the penalty provisions may still be invoked for the original non-submission — so a voluntary catch-up is not automatically free of consequence.

Where the entity’s CIN has changed after the reference date, the return for that year is still filed under the old CIN, and any revision for the same period uses the old CIN too.

What happens if the FLA return is not filed?

Non-filing by the due date is treated as a contravention of FEMA and the penalty provisions can be invoked. In ordinary practice the route back is a Late Submission Fee, which is arranged with the Foreign Exchange Department of the RBI regional office in whose jurisdiction the registered office falls.

• The late submission fee framework mirrors the one used for FIRMS filings — a base amount plus an element linked to the amount and the length of delay, subject to a cap
• The option to regularise through LSF is time-limited, after which compounding is the route
• Compounding under FEMA involves an application, a hearing, and a compounding order fixing an amount
• An open FEMA contravention surfaces in funding diligence, bank reviews, and acquisition processes
• Repeated non-filing across years compounds the exposure, because the fee applies per return

The current fee formula and cap are set by RBI circular and are revised periodically, so the amount at stake for a specific delay is confirmed against the live circular before a catch-up is planned.

How does FLA differ from the other FEMA filings?

A company with both inbound and outbound investment files on both sides of this table in the same year — FC-GPR and FLA for the money coming in, Form FC and APR for the money going out. The ODI filing guide covers the outbound leg in detail.

What documents and data should you keep ready before filing?

1. 1.Balance sheet and profit and loss account for the reporting year and the previous year
2. 2.Shareholding pattern at both March dates, split between residents and non-residents
3. 3.Country of the immediate investor for each non-resident shareholder
4. 4.Details of every overseas entity in which the company holds equity, with UIN
5. 5.Schedule of receivables from and payables to foreign group companies
6. 6.Details of foreign currency loans, trade credit, and deposits outstanding
7. 7.Employee headcount and sales and purchase figures for the year
8. 8.Previous year’s filed FLA return, for continuity of figures

Clean books make this a short exercise. Where the shareholding history is unclear or foreign group balances are not separately tracked, most of the effort goes into reconstruction rather than filing — one more reason regular bookkeeping pays for itself.

What are the common mistakes in FLA filing?

• Assuming the return is not due because nothing happened during the year
• Reporting on the accounting year end instead of the 31 March reference date
• Skipping the previous-March column, or filling it inconsistently with last year’s return
• Reporting foreign equity at the amount invested rather than at own funds at book value
• Attributing investment to the ultimate parent instead of the immediate investor country
• Including domestic balances that happen to be denominated in foreign currency
• Treating non-repatriable NRI holding as foreign investment, or the reverse
• Filing late with audited numbers instead of on time with provisional ones
• Registering the portal account against an email that nobody will monitor next July
• Filing the provisional return and never coming back to revise it after the audit

Most of these are avoidable with a single working paper that ties the shareholding register, the net worth computation, and the foreign group balances to the return. Build it once and each subsequent year is a half-day job.

Why choose Arjun Filings for FLA return filing?

Arjun Filings runs FLA return filing as a checklist-first engagement: a qualified CA or CS scopes the work, tells you exactly which documents are needed, and reviews every form before it is signed and submitted. You get a named specialist, a status update at each stage, and a compliance calendar for whatever comes next.

• Reliable desk for FLA return filing
• Input checklist each cycle
• Deadline tracking
• Human + AI support when questions arise