#fla return

Foreign investment compliance is an important responsibility for Indian companies receiving foreign direct investment (FDI) or having overseas financial commitments. One of the key reporting requirements prescribed by the Reserve Bank of India (RBI) is the FLA Return (Foreign Liabilities and Assets Return). Companies covered under this requirement must submit accurate details of their foreign assets and liabilities within the specified timeline.

Non-compliance with RBI reporting requirements can lead to regulatory complications and penalties. This guide explains the eligibility criteria, due date, filing process, and compliance requirements related to fla return in India for 2026.

What is FLA Return?

FLA Return is an annual reporting requirement introduced by the RBI for Indian entities that have received foreign investment or made overseas investments. The return provides information about an entity’s foreign liabilities, foreign assets, inward and outward investments, and other related financial details.

The data submitted through the fla return filing process helps RBI monitor India’s international investment position and maintain accurate foreign investment statistics.

Who Needs to File FLA Return?

The following entities generally need to submit an FLA Return:

Indian companies that have received foreign direct investment (FDI) and have outstanding foreign liabilities or assets.

Companies that have made overseas direct investments (ODI).

Entities that had foreign investment-related balances in previous years and continue to meet RBI reporting requirements.

Even if there are no fresh foreign transactions during the reporting year, eligible entities may still need to file the return if foreign assets or liabilities exist.

FLA Return Due Date for 2026

As per RBI guidelines, the annual FLA Return is generally required to be submitted by 15 July every year through the RBI’s Foreign Liabilities and Assets Information Reporting (FLAIR) portal.

For the financial year ending 31 March 2026, eligible entities should ensure timely fla return filing to avoid delays and regulatory issues.

Companies should verify the latest RBI notifications and instructions before submission, as reporting requirements may be updated from time to time.

Information Required for FLA Return Filing

While completing the FLA Return, companies may need to provide details such as:

Company identification details

Foreign direct investment information

Shareholding details of foreign investors

Foreign assets and liabilities

Overseas investments

Financial details including balance sheet information

Valuation-related details of foreign investments

Accurate financial records and supporting documents help ensure smooth and error-free filing.

Step-by-Step Process for FLA Return Filing

The general process for filing an FLA Return includes:

Registering the entity on the RBI FLAIR portal.

Logging in using valid credentials.

Completing the required sections with financial and investment details.

Reviewing the information for accuracy.

Submitting the return electronically.

Maintaining acknowledgment records for future reference.

Professional assistance can help businesses avoid mistakes, especially when dealing with complex foreign investment structures.

Penalties for Non-Filing or Delayed Filing

Failure to submit the FLA Return within the prescribed deadline may result in regulatory action under applicable provisions of the Foreign Exchange Management Act (FEMA), 1999.

Late submission or incorrect reporting can create compliance challenges, including possible penalties and additional scrutiny from authorities. Businesses should prioritize timely reporting to maintain proper RBI compliance.

Importance of RBI Compliance for Businesses

Maintaining timely foreign investment reporting ensures that companies remain compliant with FEMA regulations and avoid unnecessary risks. Proper compliance also improves transparency and supports smooth operations involving foreign investors and international transactions.

How ASC Group Can Help with FLA Return Compliance

Managing RBI reporting requirements can be challenging due to detailed financial disclosures and regulatory procedures. ASC Group provides professional compliance support to businesses by assisting with regulatory reporting, foreign investment compliance, and related advisory services.

With expert guidance, companies can complete their fla return filing accurately, meet RBI requirements, and reduce the risk of compliance issues.

Conclusion

FLA Return is a crucial RBI reporting obligation for Indian entities with foreign assets or liabilities. Timely and accurate submission helps businesses maintain compliance with foreign exchange regulations and avoid penalties.

Foreign investment reporting in India is strictly regulated by the Reserve Bank of India (RBI) under the Foreign Exchange Management Act (FEMA). One of the key annual compliance requirements for entities receiving foreign investment is the FLA Return. This reporting ensures transparency in cross-border financial transactions and helps the government monitor foreign liabilities and assets held by Indian entities.

This blog by ASC Group explains everything you need to know about FLA reporting, including applicability, due dates, and filing requirements in a simple and structured manner.

What is FLA Return?

The FLA Return (Foreign Liabilities and Assets Return) is an annual statement that Indian entities must submit to the RBI. It provides details of:

Foreign Direct Investment (FDI) received in India

Overseas Direct Investment (ODI) made by Indian entities

Outstanding foreign liabilities and assets as of the end of the financial year

The reporting is done through the RBI’s FLAIR (Foreign Liabilities and Assets Information Reporting) system.

FLA Return Applicability

Understanding fla return applicability is essential for determining whether an entity is required to file this return.

The FLA Return is applicable to:

Indian companies that have received FDI during any previous year

Companies that have outstanding FDI or ODI as of March 31

LLPs (Limited Liability Partnerships) that have foreign investment or overseas investment

Entities holding foreign assets or liabilities, even if no fresh investment occurred during the current year

In simple terms, if an Indian entity has any foreign investment exposure at the end of the financial year, filing becomes mandatory.

Thus, fla return applicability , extends to all eligible entities under FEMA regulations with foreign financial participation.

Due Date for Filing FLA Return

The RBI has prescribed a strict timeline for submission:

The FLA Return must be filed every year by July 15

The reporting is based on audited or unaudited financial data available as of March 31

No extension is generally provided, making timely compliance crucial

Missing the deadline may lead to regulatory scrutiny or penalties under FEMA provisions.

fla return filing Process

The fla return filing process is fully online and is carried out through the RBI’s FLAIR portal.

Key steps include:

Registration on FLAIR system using entity details

Preparation of financial data including foreign assets and liabilities

Filling the FLA Return form with investment-wise details

Verification by authorized signatory

Submission before the due date (July 15)

It is important to ensure accuracy in reporting, as discrepancies may lead to compliance issues or queries from the RBI.

Key Information Required for Filing

While completing the FLA Return, entities typically need:

Equity capital details from foreign investors

Reinvested earnings

Other capital contributions

Details of overseas subsidiaries or investments

Outstanding loans or borrowings from foreign entities

Proper reconciliation with financial statements is essential before submission.

Importance of FLA Compliance

Filing the FLA Return is not just a procedural requirement; it plays a critical role in India’s financial reporting system. It helps:

Maintain transparency in foreign investments

Track capital inflows and outflows

Ensure regulatory compliance under FEMA

Support macroeconomic data collection by the RBI

Non-compliance can result in penalties and may affect future foreign investment approvals.

Conclusion

The FLA Return is a mandatory annual compliance for Indian entities with foreign investment exposure. Understanding FLA return applicability, meeting deadlines, and ensuring accurate FLA return filing are essential for staying compliant with RBI regulations.

The Foreign Liabilities and Assets (FLA) reporting system is a mandatory annual compliance requirement under the Foreign Exchange Management Act (FEMA), 1999, regulated by the Reserve Bank of India (RBI). It is designed to capture data on foreign investments made in India and by Indian entities abroad. Professional advisory firms like ASC Group assist businesses in ensuring accurate and timely compliance with these reporting obligations, helping avoid regulatory risks and penalties.

What is an FLA Return?

The fla return is an annual statement submitted by Indian entities that have received Foreign Direct Investment (FDI) or have made Overseas Direct Investment (ODI). It captures financial details such as equity, debt, reinvested earnings, and outstanding foreign assets and liabilities as of the end of the financial year (March 31).

The reporting is done through the RBI’s FLAIR (Foreign Liabilities and Assets Information Reporting) portal.

FLA Return Applicability

Understanding fla return applicability is crucial for compliance. The return is required for:

All Indian companies registered under the Companies Act, 2013, having FDI and/or ODI outstanding as of March 31

Limited Liability Partnerships (LLPs) with foreign investment or overseas investments

Companies that have received FDI even if the investment is in earlier years but still outstanding

Entities that have made any overseas direct investment, regardless of the current value

Even if there is no fresh foreign investment during the year, reporting may still be required if balances exist on the reporting date.

Exemptions from Filing FLA Return

While the scope is broad, certain cases are exempt:

Companies or LLPs with no outstanding FDI or ODI as of March 31

Entities that have never received or made any foreign investment

Newly incorporated companies with no foreign liabilities or assets during the reporting period

However, even in borderline cases, it is advisable to verify applicability to avoid inadvertent non-compliance.

Penalties for Non-Compliance

Failure to comply with FLA reporting requirements may attract penalties under FEMA regulations. Key consequences include:

Monetary penalties under FEMA provisions for contravention

Additional compounding fees in case of delayed or incorrect reporting

Scrutiny by RBI and potential restrictions on future foreign investments

Compliance burden during audits or due diligence processes

Timely filing is essential to maintain regulatory transparency and avoid enforcement actions.

Step-by-Step FLA Return Filing Process

The fla return filing process is entirely online and involves the following steps:

Step 1: Registration on FLAIR Portal

Entities must register on the RBI FLAIR system using their corporate credentials.

Step 2: Login and Data Preparation

Prepare financial data including balance sheet details, foreign investments, and outstanding liabilities as of March 31.

Step 3: Fill the FLA Form

Enter required details such as:

Equity capital

Reinvested earnings

Other capital (debt instruments, loans, etc.)

Country-wise foreign investment details

Step 4: Upload and Validate Data

Ensure all information is accurate and consistent with audited financial statements.

Step 5: Submit the Return

After validation, submit the form on the RBI portal before the deadline, typically July 15 each year.

Step 6: Acknowledgment

Download and retain the acknowledgment receipt for compliance records.

Conclusion