FLA is Return on Foreign Liabilities and Assets which is governed by FEMA, 1999. The RBI has started a web-based system online reporting portal – Foreign Liabilities and Assets Information Reporting (FLAIR) for submission of foreign liabilities and assets (FLA) return.

Applicability of FLA return

Following entities are required to file for FLA return:

> A Company within the meaning of section 1(4) of the Companies Act, 2013.

> A limited liability partnership registered under the Limited Liability Partnership Act, 20080

> Others, including SEBI-registered Alternative Investment Funds (AIFs), Partnership Firms, Investment Vehicles, Public Private Partnerships, etc.

Eligibility criteria for FLA return

The annual return on Foreign Liabilities and Assets (FLA) is required to be submitted directly by all the above-mentioned entities, if they have:

√ Received FDI (foreign direct investment), and/or

√ Made FDI abroad (i.e. overseas investment), in the previous year(s) including the current year

> If a company has received only share application money and does not have any foreign direct investment or overseas direct investment outstanding as of end-March of the reporting year, then that company is not required to fill up FLA return.

> If the company has not ‘received any fresh FDI and/or ODI (overseas direct investment)’ in the latest year but the company has outstanding FDI and/or ODI, then that company is required to submit the FLA Return.

All Indian Companies which have received FDI (foreign direct investment) and/or made FDI abroad (i.e. overseas investment) in the previous year(s) including the current year i.e. who hold foreign Assets or Liabilities in their Balance Sheets.

Due date for filing FLA return

On or before 15th July every year, otherwise it will be treated as a violation of FEMA and penalty clause may be invoked for violation of FEMA.

Due date has been extended till 31stJuly 2020.

(FLAIR System: Foreign Liabilities and Assets Information Reporting System) Portal to file FLA Return: FLAIR (https://flair.rbi.org.in/fla/faces/pages/login.xhtml)

Documents/Information required for Filing FLA Return:

√ Valid email id & mobile number

√ Full set of financial statements (Audited/unaudited)

√ Authority and Verification letter

√ PAN card + Registration Certificate + MOA & AOA of the Company

√ Previous year’s copy of FLA Return filed by the Company

FAQs on filing of FLA Return:

1. What if company’s accounts are not audited before the due date of submission?

If a Company falls under the eligibility criteria, it is required to file FLA return. Now, if the company’s accounts are not audited before the due date of submission, FLA Return should be submitted based on unaudited (provisional) account. Once the accounts get audited and there are revisions from the provisional information submitted by the company, they are supposed to submit the revised FLA return based on audited accounts by end – September.

2. In case where Account Closing Period of the company is different from reference period (end-March), can we report the information as per Account Closing Period?

No. Information should be reported for all the reference period, i.e. Previous March and Latest March. If Account Closing Period of the company is different from the reference period, then information should be given for the reference period on internal assessment.

RBI approval would be required in case an entity wants to:

> File FLA return beyond the due date or file FLA return for any previous years;

> Delete or modify the previous version of FLA return.

The RBI approval may be obtained by sending an email to: –s[email protected]


Disclaimer: The entire contents of this article is solely for information purpose and have been prepared based on relevant provisions and as per the information existing at the time of the preparation. It doesn’t constitute professional advice or a formal recommendation. The author has undertaken utmost care to disseminate the true and correct view and doesn’t accept liability for any errors or omissions. You are kindly requested to verify & confirm the updates from the genuine sources before acting on any of the information’s provided herein above.


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April 2021