IndiaFilings » Learn » FLA Return Filing » What is FLA Return?

What is FLA Return?

What is FLA Return

What is FLA Return?

The FLA Return is an essential yearly filing for Indian businesses, LLPs, and other organizations that have either received foreign direct investment (FDI) or have invested FDI overseas. This article will cover everything you need to know about the FLA Return, including who needs to file it, key regulations, and how to submit it.

At IndiaFilings, we offer expert assistance for FLA Return filing, ensuring that Indian businesses and LLPs navigate the process seamlessly.

Introduction to FLA Return

The FLA Return is an annual submission required by Indian organizations that have either received foreign direct investment (FDI) or have undertaken FDI overseas to the Reserve Bank of India (RBI). This report is designed to gather details on the foreign liabilities and assets that these entities report on their balance sheets. It falls under the Foreign Exchange Management Act, 1999 (FEMA) regulatory framework, ensuring comprehensive oversight of India’s foreign exchange and cross-border financial transactions.

Applicability of FLA Return

The FLA Return must be filed by a range of entities, including:

Non-Applicability of FLA Return

The requirement to submit the FLA Return does not apply to entities in the following situations:

  • If the entity has neither received Foreign Direct Investment (FDI) nor made any overseas investments in the current or previous years.
  • If the entity’s foreign investment is limited to sharing application money without any outstanding FDI or overseas direct investment by the end of March of the reporting year,
  • Suppose non-resident shareholders have sold their shares to residents within the reporting period, and the entity has only issued shares to non-residents. In that case, the invested capital cannot be converted back into foreign currency and taken out of the country.

Due Date for Filing FLA Return

The FLA Return must be filed by the 15th of July each year. In cases where the accounts have not been audited by this deadline, entities should file the FLA Return using unaudited or provisional account figures. Should the accounts be audited subsequently, a revised FLA Return must be filed, with the deadline for this revised submission being the 30th of September of the same year.

Procedure for FLA Return Filings

Since June 2019, the process for submitting the annual FLA return has transitioned from format and email-based reporting to a web-based system. Here’s how entities can navigate this system on the FLAIR portal:

Setting Up a Business User

  • Access the FLAIR Portal: Access the official website of the FLAIR portal.
  • Register as a New Entity User: Click on the “Registration Form for New Entity User” to begin registering.
  • Fill in the Entity Details: Provide comprehensive details about your entity, including the Corporate Identification Number (CIN)/Registration Number, Company Name, PAN Number, registered address with PIN, and contact details. Confirm any changes to the CIN/Registration Number or company name during the last financial year ending in March.
  • Authorized Person’s Information: Input details of the authorized person, including name, PAN number, and contact information.
  • Upload Documents: Attach a verification letter, an authority letter, and copies of the PAN cards for the entity and the authorized person.

Preparing and Submitting the FLA Return

  • Create and Verify Business User: Once you have successfully registered and received your password from the RBI via email, log in to prepare the FLA return. The return is structured into five sections for comprehensive reporting.
  • Review and Submit: After completing the FLA return, download it, review it for accuracy, and submit it online through the FLAIR portal.

After Submission

  • Acknowledgement: Upon successful submission, the FLAIR portal will generate an acknowledgement stating that the FLA return has been processed successfully for the year.

Important Notes:

The registered email ID is crucial as it will receive the password and OTP for each login attempt; ensure it’s entered correctly.

  • Should there be any changes in the entity’s email ID or name during the reporting period, deactivate the current account by emailing [email protected] and creating a new one for the current year’s FLA return filing.
  • If the CIN/registration number remains unchanged, previously entered data will populate in the new account, facilitating the update process.

Sections of the FLA Return

The Reserve Bank of India (RBI) has structured the FLA Return into five distinct sections for a comprehensive capture of foreign liabilities and assets by Indian entities:

Section I – Identification particulars

  • Prefilled Information: Company name, PAN, CIN, and head of the institution’s email are auto-filled post successful user creation.
  • Contact Details: Provide details of the contact person, including name, phone number, mobile number, email, designation, website, and account closing date.
  • NIC Code: Use National Industrial Classification (NIC) -2008 codes for industry specification. If multiple activities are conducted, select the primary revenue-generating activity.  
  • Company Specifics: Indicate if the company is listed as an Asset Management Company, has technical foreign collaborations, or has conducted any business activity in the last financial year. Also, specify the nature of FDI involvement.

Section II – Financial details

  • Capital: Disclose the total paid-up capital, differentiating between participating and non-participating share capital.
  • Profit and Loss Account: Detail the profit/loss before and after tax, dividends issued, and any tax on dividends from the April-March period.
  • Reserves & Surplus: Report reserves and surplus figures separately from accumulated profit/loss balances.
  • Sales and Purchases: Include domestic and foreign sales and purchases, including goods and services, based on the profit and loss account.
  • Employee Information: State the number of employees on the payroll of the Indian reporting company.

Section III – Foreign Liabilities

  • FDI in India (10% or more equity participation): Provide details on the number of foreign direct investors, initial FDI receipt date, investor details, equity holding percentages, and liabilities to direct investors, including disinvestments.
  • FDI in India (less than 10% equity holding): Similar details as above for entities with less than 10% equity holding by foreign investors.
  • Portfolio Investment in India: Specify equity and debt securities held by non-resident investors, excluding FDI.
  • Other Liabilities: Report financial liabilities with foreign unrelated parties, excluding domestic liabilities even if in foreign currency.

Section IV – Foreign assets

  • Overseas Direct Investment (ODI) 10% or more: Detail the number of Direct Investment Enterprises (DIE) abroad, investment specifics, equity holdings, sales, purchases, employee numbers, and claims on DIE, including disinvestments.
  • ODI (less than 10% equity holding): Provide similar information for investments where the Indian company holds less than 10% equity in the DIE.
  • Debt Securities and Portfolio Investment Abroad: Include investments in money market instruments and bonds by the reporting company under portfolio investment abroad.
  • Other Assets: Report financial assets with foreign unrelated parties, excluding domestic assets.

Section V – Variation Report

This section auto-generates a report comparing the current year’s data with the previous year, highlighting variations. This section is not editable by the company.

  • This structured approach ensures a detailed and organized reporting of foreign engagements by Indian entities to the RBI.
  • Before final submission to the RBI, the company can download a draft of the FLA return for review and verification. This step ensures that all information is accurate and complete.

Acknowledgement: As mentioned above, upon the final submission of the FLA return, the reporting Indian company will instantly receive a system-generated acknowledgement confirming the receipt of the submitted data by the RBI. It’s important to note that the RBI will not send a separate email for this acknowledgement; it is provided at the time of submission.

Consequences of Non-Compliance

Failing to submit the FLA Return by the stipulated deadline constitutes a breach of FEMA regulations, potentially incurring penalties. Under FEMA, penalties for non-compliance or submitting incorrect information can reach up to three times the sum involved in the breach, or Rs. 2 Lakh when the infringement cannot be quantified. Furthermore, for ongoing violations, a daily fine of Rs. 5,000 may be levied for each day the violation persists beyond the initial occurrence.

Guidelines for Effortless FLA Return Submission

  • Gather Necessary Documents: Before initiating the filing process, make sure to have all essential documents ready, including your financial statements (audited or unaudited), PAN card, registration certificate, and the previous year’s FLA Return, if it was filed.
  • Access Details: Ensure you have your login details and the OTP (One-Time Password) for a smooth login experience on the RBI Portal.
  • Adhere to Instructions: Utilize the user manuals for the portal’s registration and filing processes to guide you through each step meticulously.
  • Double-Check Entries: Diligently review all the data you input into the return to prevent any inaccuracies that could lead to penalties or the need for corrections later.


In summary, the FLA Return is a critical regulatory obligation for Indian entities involved in foreign direct investments through receiving FDI or engaging in overseas investments. Familiarity with the criteria, regulations, and submission procedures is key to ensuring that these returns are filed punctually and precisely. Adhering to the advice and recommendations outlined in this detailed guide will facilitate entities in fulfilling their FLA Return requirements and maintaining compliance with the RBI’s directives.  

IndiaFilings provides expert help filing your FLA returns, making the process straightforward and hassle-free.