All About FLA Return of RBI: A Complete Guide for Indian Organizations

The Foreign Liabilities and Assets (FLA) Return is an annual filing requirement mandated by the Reserve Bank of India (RBI) for Indian companies, LLPs, and other entities engaged in Foreign Direct Investment (FDI) activities. This comprehensive guide provides essential information about the FLA Return, including its purpose, applicability, filing procedures, and compliance tips.


Applicability of FLA Return:

The FLA Return applies to various entities, including companies registered under the Companies Act, 2013, LLPs registered under the Limited Liability Partnership Act, 2008, and other entities such as SEBI-registered Alternative Investment Funds (AIFs), Partnership Firms, and Public Private Partnerships (PPPs).


Non-Applicability of FLA Return:

Certain scenarios exempt entities from filing the FLA Return. This includes entities that haven't received FDI or made foreign investments, have no outstanding FDI or foreign direct investments, or have conducted non-repatriable share transfers between non-resident and resident shareholders.


Due Date for Filing FLA Return:

The FLA Return must be filed within 15 days after the end of each calendar year. If accounts are unaudited by the due date, entities can file the return using provisional or unaudited accounts. However, a revised FLA Return based on audited accounts must be submitted by September 30th of the same year.


Registration and Filing Process:

Entities need to register on the RBI Portal at https://flair.rbi.org.in to file the FLA Return. The registration process involves submitting the "FLA User Registration Form" along with scanned and verified Authorization and Verification Letters. Once registered, entities can log in to the portal, access the filing section, and proceed with submitting the FLA Return.


The FLA Return consists of five sections:

  • Identification Particulars: Includes entity details, such as name, PAN, CIN, contact person, and nature of business.
  • Financial Details: Requires information on total paid-up capital, profit and loss, reserves and surplus, and sales and purchases during the fiscal year.
  • Foreign Liabilities: Covers details of FDI and other foreign liabilities, including non-resident equity and participating preference share capital.
  • Foreign Assets: Involves reporting overseas direct investments and other foreign assets, such as equity and debt securities.
  • Variation Report: Auto-filled section based on the entered data. Entities must review and ensure accuracy before submission.

Penalties for Non-Compliance:

Failure to submit the FLA Return on time or providing false information can result in penalties under FEMA. Violators may face fines up to 30% of the amount involved or Rs. 2 lakh, and if the violation persists, an additional penalty of Rs. 5,000 per day may be imposed.


Tips for a Smooth Filing Process:

To ensure a hassle-free filing process, follow these tips:


  • Gather all required documents, including audited/unaudited financial statements, PAN card, registration certificate, and previous year's FLA Return (if applicable).
  • Keep login credentials and OTP readily accessible for easy access to the RBI Portal.
  • Follow step-by-step instructions provided in user manuals for registration and filing.
  • Thoroughly review entered information for accuracy before submitting the return.

Conclusion:

Complying with the FLA Return is essential for Indian entities engaged in FDI or foreign investments. This comprehensive guide offers a complete understanding of the FLA Return, including its purpose, applicability, filing process, and compliance tips. By following the provided guidelines, organizations can successfully meet their obligations and submit the FLA Return accurately and on time. 

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