FEMA / RBI Compliance
FLA Return: Who Must File, When, What & How — The Complete 2026 Guide
Reviewed by CA Neeraj Rohilla, FCA — Chartered Accountant, Startup Advisory, Saket, New Delhi. Last reviewed: June 2026.
In short
The FLA return (Foreign Liabilities and Assets Annual Return) is a mandatory annual filing with the Reserve Bank of India under FEMA, 1999. Any India-resident entity — company, LLP, AIF, partnership firm or PPP — that has received FDI or made ODI and still has those foreign liabilities or assets outstanding as on 31 March must file it. There is no minimum threshold, and the trigger is your balance-sheet position, not transactions during the year. It is filed online on the FLAIR portal; the due date is 15 July (so 15 July 2026 for FY 2025-26). File provisional figures if your audit isn't done, then revise by 30 September. Missing it is a FEMA contravention — not a minor slip.
If your business has foreign shareholders, a foreign parent, or a subsidiary or joint venture abroad, the FLA return is one compliance that quietly catches people out — because it is owed every single year the foreign investment sits on your books, even in years when nothing happened. This guide answers the four questions that matter — who, when, what and how — and then covers the penalties, the exemptions, and how the FLA fits alongside FC-GPR, FC-TRS and the APR.
What is the FLA return — and why does RBI want it?
The Foreign Liabilities and Assets (FLA) Annual Return is a statistical, position-based return through which Indian entities report to the RBI:
- Foreign liabilities — inward investment into your entity (FDI): equity held by non-residents, compulsorily convertible instruments, inter-company loans from a foreign parent/group, and similar.
- Foreign assets — outward investment by your entity (ODI): equity in foreign subsidiaries or joint ventures, loans extended abroad, and guarantees issued.
The RBI uses this data to compile India's International Investment Position (IIP) and Balance of Payments (BoP), and to respond to IMF surveys. It is governed by FEMA, 1999 and was introduced via A.P. (DIR Series) Circular No. 45 dated 15 March 2011. In short: it is a census of India's cross-border investment, and your filing is part of it — which is exactly why RBI treats non-filing as a contravention rather than a formality.
Why you should care (the "why to file")
- It is a legal obligation under FEMA — non-filing is a contravention, not an optional disclosure.
- RBI and your AD bank may refuse to process future inward or outward remittances until your FLA compliance is current — which can stall your next funding round or repatriation.
- FLA data that contradicts your FC-GPR/ODI filings can trigger an RBI query, so getting it right keeps your whole FEMA record consistent.
- The cost of fixing a default later (compounding) is far higher — in money and time — than filing on time.
Who must file the FLA return? (the "whom")
The return must be filed by every India-resident entity that has received FDI and/or made ODI in the current or any previous year, and that has those foreign liabilities or assets outstanding as on 31 March of the reporting year. That includes:
- Companies registered under the Companies Act, 2013 (private, public, OPC).
- Limited Liability Partnerships (LLPs) with foreign capital contribution.
- SEBI-registered Alternative Investment Funds (AIFs) and other investment vehicles.
- Partnership firms (RBI issues a dummy CIN on request for FLAIR registration).
- Public Private Partnerships (PPPs) and similar entities.
The key principle — position, not transactions. The obligation is based on what is outstanding on your balance sheet as on 31 March, not on whether you did anything during the year. If you received FDI five years ago and have had no fresh inflow since, you still file every year until that investment is fully divested. Indirect/downstream foreign holdings and a dormant overseas subsidiary still count.
Who does NOT need to file? (the common exemptions)
Most people searching "FLA return" actually want to know whether it applies to them at all. You are not required to file if any of the following describes you:
| Situation | FLA required? |
|---|---|
| Never received FDI or made ODI in any year | No |
| Zero outstanding foreign assets and liabilities as on 31 March | No |
| Only have an External Commercial Borrowing (ECB) — no FDI/ODI | No (ECB is not FDI) |
| Only have Foreign Portfolio Investment (FPI) | No (FPI is not classified as FDI) |
| Shares issued to non-residents only on a non-repatriable basis | No |
| Only share application money received — shares not yet allotted | No (not yet treated as FDI) |
| Individual investor (not an entity) | No |
A practical note from us: if you are unsure, filing when not strictly required is harmless; not filing when required is costly. When the picture is borderline, get it checked.
When to file? (the "when")
- Reporting date: position as on 31 March of the financial year.
- Due date: 15 July every year. For FY 2025-26 (position as on 31 March 2026), the due date is 15 July 2026.
- Audit not ready? File using provisional/unaudited figures by 15 July, then submit a revised return with audited figures by 30 September — no separate RBI approval needed for that revision.
On the "31 July" you may have seen: RBI extended the deadline to 31 July as a one-off in 2025. That is not the standing rule. Plan and file by 15 July 2026, and treat any extension RBI may announce as a bonus — not a plan. Watch RBI circulars in June–July for the year's confirmed position.
What to file? (the "what" — the five sections)
The FLA return is filled on the FLAIR portal and broadly has five parts. Compile this from your 31 March balance sheet (audited or provisional) before you log in:
| Section | What it captures |
|---|---|
| 1. Entity / contact details | CIN/LLPIN, PAN, NIC industry code, contact person and authorised filer. |
| 2. Financial details | Total paid-up capital, reserves & surplus, sales/turnover, total assets, profit/loss, employees — from the balance sheet. |
| 3. Foreign liabilities (inward FDI) | Non-resident equity, convertible instruments, inter-company borrowings from foreign group, by investor's country of residence and whether holding is <10% or ≥10%. |
| 4. Foreign assets (outward ODI) | Equity in overseas subsidiaries/JVs, loans extended abroad, guarantees — by country. |
| 5. Other / variation details | Other foreign investment, and the movement/variation in positions during the year. |
You do not attach the financial statements themselves. Market-value calculations for listed and unlisted equity are computed by the portal — you don't do them manually. A frequent error is incorrect country attribution: report foreign liabilities by the immediate investor's country of residence, not the ultimate beneficial owner's country.
How to file? (the "how" — the FLAIR process)
All FLA returns are filed online through the RBI's FLAIR portal (Foreign Liabilities and Assets Information Reporting) at flair.rbi.org.in. Email/offline Excel filing has been discontinued (AIFs are the current exception). The steps:
- Register (one-time). Create the entity account using CIN/LLPIN, PAN and a valid email; partnership firms request a dummy CIN from RBI. Submit the Authority Letter and Verification Letter in RBI's format. RBI verifies and emails your login credentials. Start 4–6 weeks before the deadline — this step is where people lose time.
- Keep a Class 3 Digital Signature Certificate (DSC) ready — it is mandatory to submit.
- Log in and select the reporting year (the portal opens for the preceding year's data).
- Fill all five sections from your 31 March figures, then run the portal's validate check to catch missing or mismatched fields.
- Submit with DSC. The portal generates an acknowledgement with a reference number — download and retain it as proof of filing.
If your registered CIN, name or email changes, you cannot edit it in place — you write to RBI's designated FLA email (linked on the FLAIR portal) to deactivate and re-register with updated details.
FLA vs FC-GPR vs FC-TRS vs APR — don't confuse them
This is the single biggest source of confusion. The FLA does not replace your event-based FEMA filings — they run in parallel.
| Filing | Triggered by | Nature | Timing |
|---|---|---|---|
| FC-GPR | Issue of shares to a non-resident | Event-based (transaction) | Within 30 days of allotment |
| FC-TRS | Transfer of shares between a resident and a non-resident | Event-based (transaction) | Within 60 days of transfer/remittance |
| FLA | Outstanding FDI/ODI on the balance sheet | Position-based (annual snapshot) | By 15 July each year |
| APR | Holding an overseas investment (ODI) | Annual performance of the foreign entity | By 31 December each year |
If you have made an ODI, you typically owe both the FLA (by 15 July) and the APR (by 31 December) — separate filings, monitored by different RBI departments.
Penalties for non-filing or late filing
Missing the FLA deadline is treated as a contravention of FEMA, 1999, regardless of audit status. The exposure:
- Late Submission Fee (LSF): ₹7,500 for delayed filing, as levied by RBI.
- FEMA Section 13 penalty: where the contravention is quantifiable, up to three times the amount involved; where it is not quantifiable, up to ₹2,00,000; and for a continuing default, up to ₹5,000 per day.
- Compounding: in practice, defaults are regularised through compounding with RBI — which can take several months and involves documentation and cost well beyond the filing itself. RBI's regional offices can compound without an upper limit.
The headline numbers look alarming; in practice RBI usually compounds for far less than 3x. But the realistic takeaway is simpler: the cheapest, fastest outcome by a wide margin is to file on time.
The mistakes we see most often
- "No transactions this year, so nothing to file." Wrong — outstanding FDI/ODI on 31 March is the trigger.
- Treating FLA as the same as FC-GPR. They are separate; both are required.
- Filing provisional and forgetting the revised return by 30 September after audit.
- Leaving FLAIR registration to July — credentials and DSC take time; start in late May/June.
- Wrong country attribution — report by the immediate investor's country, not the ultimate parent's.
- Ignoring a dormant overseas subsidiary — the outstanding ODI is still reportable.
How Startup Advisory Can Help
Startup Advisory is a CA-led firm in Saket, New Delhi that handles FEMA and RBI reporting for companies, LLPs and startups across Delhi NCR — so your foreign-investment compliance stays clean and on time:
- FLA applicability review — a clear yes/no on whether you must file, with the exemptions checked against your facts.
- FLAIR registration and filing — from dummy-CIN/DSC setup to the five-section return, validation and the revised return after audit.
- Consistency with your other filings — we map FLA to your FC-GPR, FC-TRS and ODI/APR record so the numbers reconcile.
- End-to-end support from a named Chartered Accountant, backed by our bookkeeping and Virtual CFO services where you need ongoing finance leadership.
Call 9311972982 or book a free consultation to get your FLA return filed well before 15 July.
This article is general information, not professional advice. The FLA return is governed by the RBI under FEMA, 1999; forms, deadlines, the FLAIR process and penalty provisions are set by the RBI / Government of India and can change — confirm the current position for your entity's specific facts with a qualified professional before acting.
