FLA Return Filing Services – RBI-Compliant Reporting with TAXAJ

📄 FLA Return – Annual Return on Foreign Liabilities and Assets

The FLA Return (Foreign Liabilities and Assets Return) is an annual filing requirement under the Foreign Exchange Management Act (FEMA), 1999, mandated by the Reserve Bank of India (RBI) through its Foreign Exchange Department. This return collects detailed information about foreign direct investments (FDI), overseas direct investments (ODI), and other cross-border financial transactions of Indian entities.

It must be filed online with the RBI by July 15th every year, covering the financial year ending March 31.

🏢 Who Needs to File the FLA Return?

The FLA Return (Foreign Liabilities and Assets Return) is mandatory under the Foreign Exchange Management Act (FEMA), 1999, and must be filed annually by Indian entities that have any form of foreign investment—either received or made.

✅ Entities Required to File the FLA Return:

✅ Filing is mandatory, even if:

✅ There is no change from the previous year

✅ The company is under liquidation or dormant

✅ The company has not received FDI in the current year but did in the past

❌ Who is Not Required to File:

❌ Indian entities that have never received FDI and have not made

any ODI.

❌ Individuals or sole proprietors (as the filing is for incorporated

entities).

❌ Domestic companies with 100% Indian ownership and no foreign

affiliations.

Indian Companies that have received FDI

Companies that received any amount of Foreign Direct Investment (FDI), even if it was received in previous years and no new investment came in the current year.

Indian Companies that have made ODI

Companies that have invested in Joint Ventures (JV) or Wholly Owned Subsidiaries (WOS) abroad under the Overseas Direct Investment (ODI) route.

Limited Liability Partnerships (LLPs)

LLPs that have received foreign capital contribution or made investments abroad.

Companies with Foreign Shareholders

Even if no transaction occurred during the financial year, the existence of foreign shareholding triggers the filing requirement.

Indian Subsidiaries or Branches of Foreign Companies

Branch offices, project offices, or subsidiaries of foreign entities operating in India.

Entities Under Liquidation or Inactive

If a company with past foreign liabilities or assets is undergoing winding up or is dormant, it must still file the FLA Return.

Companies with Nil Foreign Assets/Liabilities as on March 31

Even if there is no outstanding foreign investment or overseas asset as of March 31, a “NIL Return” must be filed if the entity has ever received or made foreign investment.

📋 What Information is Required in the FLA Return?

Filing the FLA Return with the Reserve Bank of India (RBI) requires specific financial and ownership data relating to foreign liabilities and foreign assets held by the Indian entity as on 31st March of the financial year.

🏦 1. Financial Details of the Indian Entity

✅ Name, PAN, and CIN of the company/LLP

✅ Type of business activity (NIC codes)

✅ Contact and Authorized Person details

✅ Status of accounts: Audited or Provisional

✅ Net worth, total assets & liabilities

⚠️ Important Notes:

✅ You may file using provisional accounts if audited financials are

not yet ready.

✅ If there are no foreign liabilities or assets, but your entity has

ever received FDI or made ODI, you must still file a NIL return.

💼 TAXAJ ensures that your FLA return is filed accurately with correct classification of assets and liabilities—saving you from compliance risks and future scrutiny.

🌍 2. Foreign Liabilities (Inbound Investments)

Details of foreign investment received, including:

FDI: Equity participation by non-residents
Repatriable preference shares, debentures, and other instruments
Outstanding foreign currency loans (External Commercial Borrowings – ECB)
Trade credit and other payables to foreign parties
Country of the foreign investor
Direct vs Indirect shareholding

🌐 3. Foreign Assets (Outbound Investments)

Details of investments made by the Indian entity abroad, such as:

Overseas Direct Investments (ODI) in JVs and WOS
Loans or guarantees extended to foreign subsidiaries
Equity investments in foreign companies
Country of investment
Nature of control (wholly owned, joint venture, associate)

🧾 4. Shareholding Structure

✅ Percentage of foreign shareholding

✅ Type of foreign investors (individuals, companies, institutions)
✅ Changes in shareholding during the year

📅 5. Previous Year’s Comparison

✅ Movement in foreign liabilities and assets compared to the

previous year

✅ New investments or disinvestments

✅ Changes in valuation or restructuring

⏰ Due Date & Mode of Filing – FLA Return

Filing the Foreign Liabilities and Assets (FLA) Return is an annual compliance requirement under FEMA regulations. It is crucial for Indian entities with foreign investments to submit the return accurately and on time to avoid penalties.

📅 Due Date for Filing FLA Return

The due date for filing the FLA Return is 15th July every year.
The return must report the foreign assets and liabilities position as of 31st March of the relevant financial year.

📝 Even if accounts are unaudited, provisional figures can be used to meet the deadline. Once audited financials are available, no revised return is required unless specifically requested by RBI.

🖥️ Mode of Filing – Online via RBI’s FLAIR Portal

Filing is done online through the FLAIR (Foreign Liabilities and Assets Information Reporting) portal hosted by the Reserve Bank of India.

Steps to File:

Register your entity on the FLAIR portal (https://flair.rbi.org.in)
Obtain User ID & Password (first-time filers must submit an email request)
Fill in the FLA return form using:
- Provisional or audited financials
- Foreign investor and investee details
Submit the return electronically before the due date

⚠️ Late Filing / Non-Compliance Consequences:

✅ Considered a contravention of FEMA

✅ May lead to monetary penalties under FEMA Section 13

✅ May affect future FDI/ODI transactions or RBI approvals

💼 TAXAJ provides end-to-end support—from registration on FLAIR to compiling financial data, filing the return, and handling post-filing clarifications.

⚠️ Consequences of Non-Filing FLA Return

Failure to file the Foreign Liabilities and Assets (FLA) Return within the prescribed timeline is treated as a violation of FEMA regulations and may attract serious legal and financial consequences from the Reserve Bank of India (RBI).

❗ Legal Consequences Under FEMA

1. Contravention of FEMA Provisions

Non-filing or delayed filing is a breach of Section 13 of the Foreign Exchange Management Act, 1999.

2. Penalties Imposed by RBI

- A monetary penalty up to ₹2,00,000 for the first instance.

- An additional penalty of ₹5,000 per day for continuing default

may apply.

3. Compounding Proceedings

- RBI may initiate compounding of the offence, which involves:

- Filing detailed explanations

- Attending hearings

- Paying compounding fees

- This is time-consuming, expensive, and reputationally damaging.

🔔 Don’t Risk Compliance Penalties

– File Your FLA Return Before 15th July

Let TAXAJ take care of your RBI & FEMA compliance professionally.

📉 Operational & Business Impact

1. Hindrance to Future Foreign Investments

- Non-compliance can affect your company’s ability to:

- Receive further FDI

- Remit or repatriate funds

- Invest abroad (ODI)

2. Auditor & Banker Scrutiny

- Auditors may report non-compliance in your financial statements.

- Banks may withhold processing of foreign transactions or ECBs

due to pending regulatory filings.

3. Loss of Credibility

May reflect poorly during due diligence by investors, venture capitalists, or joint venture partners.

🛡️ How TAXAJ Helps You Stay Compliant

💼 Timely filing via RBI’s FLAIR portal

💼 Reconciliation of shareholding and cross-border investment data

💼 Correction or re-filing support, if required

💼 Representation during FEMA compounding (if needed)

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At TAXAJ, we understand that company Law disputes—whether personal, financial, property-related, or contractual—can be stressful, time-consuming, and emotionally draining. That’s why we offer expert, reliable, and end-to-end legal support in NCLT matters, ensuring our clients receive justice with clarity, efficiency, and integrity.

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