Annual Return on Foreign Liabilities and Assets (FLA): Complete Guide

Entities in India that have received foreign direct investment or made overseas investments may be required to complete the FLA return filing every year. The Annual Return on the Foreign Liabilities and Assets allows the Reserve Bank of India (RBI) to collect information about foreign investments received and overseas assets held by Indian entities.

The return is generally due by 15 July and it must be submitted through the RBI FLAIR portal. Since this reporting requirement falls under the Foreign Exchange Management Act, 1999 (FEMA), entities should verify and examine their applicability and file accurate information on time.

Quick Summary

What Is an FLA Return?

The FLA Return is an annual information return containing details of an Indian entity’s foreign liabilities and foreign financial assets.

Foreign liabilities generally include qualifying investments received from non-residents. Foreign assets may include equity, debt or other financial claims held by an Indian entity in an overseas enterprise.

The RBI uses this information to compile India’s balance-of-payments and international investment position statistics. The FLA Return is different from the annual return filed with the Registrar of Companies. It is also separate from the foreign-asset disclosures that applicable individuals make in their income-tax returns. 

Remind Legal can help businesses determine FLA applicability and organise the information required for RBI reporting.

FLA Return Applicability

FLA return filing generally applies to Indian companies, limited liability partnerships and other entities covered by RBI instructions when they: -

• have received foreign direct investment and hold outstanding foreign investment as of 31 March; or
• have made overseas direct investment and continue to hold foreign assets as of 31 March.

The filing obligation may continue even when no fresh foreign investment or overseas investment occurred during the year, provided an outstanding investment position remains at the end of the financial year.

An entity is generally not required to file if it has neither outstanding foreign investment nor overseas direct investment as of 31 March. An entity holding only share application money, without any qualifying outstanding foreign investment or overseas investment, should examine and verify the prevailing RBI instructions before determining applicability.

FLA Return Due Date

The ordinary or standard FLA return due date is 15 July following the end of the relevant financial year. Accordingly, the return for the financial year ending 31 March 2026 was ordinarily due on 15 July 2026.

If audited financial statements are not available by the due date, the entity can easily submit the return using provisional or unaudited figures. It can subsequently revise the return using audited figures, normally by 30 September.

An extension is effective only when specifically announced by the RBI. An extension granted for income-tax or MCA filings does not automatically extend the FLA deadline.

Information Required for FLA Return Filing

The information normally required includes: -

• CIN, LLPIN, PAN and registered-office details;
• financial statements for the relevant year;
• details of foreign investors and their countries of residence;
• paid-up capital and ownership structure;
• opening and closing foreign investment balances;
• overseas investment and disinvestment details;
• foreign subsidiary or associate information;
• profit and loss, reserves, sales and purchase figures; and
• relevant book-value or market-value information.

The figures should be reconciled with financial statements, investment records and earlier FLA Returns. Reporting must follow the valuation method and units prescribed on the portal.

How to File Through the RBI FLAIR Portal

1. Access the official RBI FLAIR portal and then register the reporting entity.
2. Create or authorise the appropriate and suitable user and verify the registered email address.
3. Select the relevant financial year and open the applicable FLA Return.
4. Enter the entity, financial and various foreign investment details.
5. Check the figures against the financial statements and supporting records.
6. Submit the return online and retain its acknowledgement.

File the return directly through the official RBI portal. It is not submitted through an authorised dealer bank or the MCA portal.

FLA Return Penalty for Late Filing

A delay in filing the constitutes delayed FEMA reporting. Under the RBI’s Late Submission Fee framework, delayed submission of an FLA Return may attract a fixed LSF of ₹7,500, subject to the prevailing rules and the availability of the regularisation facility.

If a contravention is not regularised through the applicable framework and structure, proceedings may be initiated under FEMA. Section 13 of FEMA permits penalties of up to three times the amount involved where it is quantifiable or up to ₹2 lakh where it is not quantifiable. Continuing contraventions may attract an additional penalty.

These broader FEMA penalties are not automatically imposed for every late return. The consequences depend on the facts, duration and manner in which the default is addressed.

FLA Return Versus Schedule FA in ITR

Filing one does not replace the other.

Conclusion

FLA return filing is an important FEMA reporting requirement for covered Indian entities with outstanding foreign investment or overseas direct investment. Entities should verify their applicability, reconcile the relevant financial data and submit the return through the RBI FLAIR portal within the prescribed deadline. Remind Legal can assist with applicability assessment, data reconciliation and timely FLA return filing.