The annual return on Foreign Liabilities and Assets (FLA) is an RBI reporting requirement under FEMA, 1999 for Indian entities that hold inward foreign direct investment (FDI) or have made overseas direct investment (ODI). It is not a return that every company files, and a single cross-border payment does not trigger it. The test is whether the entity's balance sheet carried such investment at end-March. This guide covers who files, the 15 July due date, what to do when accounts are not yet audited, the cases where no return is needed, and the mistakes that most often lead to revisions.
The legal basis and the current RBI guidance
The filing requirement sits in the Foreign Exchange Management (Mode of Payment and Reporting of Non-Debt Instruments) Regulations, 2019 (Notification No. FEMA 395/2019-RB dated 17 October 2019, as amended up to 13 June 2026). The regulation says an Indian company which has received FDI, or an LLP which has received investment by way of capital contribution, "in the previous year including the current year, shall submit form FLA to the Reserve Bank on or before the 15th day of July of each year."
RBI's detailed operating guidance is in its FAQ on the Annual Return on Foreign Liabilities and Assets (FLA) under FEMA, 1999, updated 1 July 2026. The FAQ is the practical reference for scope, boundary cases, revisions and field-level treatment, and it is worth re-reading each year because RBI updates it.
Who must file
According to the FAQ, the return is required from entities that have received FDI and/or made FDI abroad (overseas direct investment) in the previous year(s) including the current year, that is, entities which hold foreign assets or liabilities of this kind in their balance sheets. The covered entities are:
- an entity within the meaning of section 1(4) of the Companies Act, 2013;
- a Limited Liability Partnership registered under the Limited Liability Partnership Act, 2008; and
- others, which RBI says include SEBI-registered Alternative Investment Funds (AIFs), partnership and proprietary firms and public private partnerships.
Filing is online through RBI's Foreign Liabilities and Assets Information Reporting (FLAIR) portal at flair.rbi.org.in. An AIF must register on FLAIR, but because the portal does not yet provide an online AIF format, the FAQ asks AIFs to write to RBI after registration for the latest format.
The two-date test: the heart of the applicability check
The FLA return captures two years of position data, the previous March and the latest March. RBI's FAQ (Q13) states that if the entity has any outstanding FDI and/or ODI as on end-March of the reporting year and/or the previous year, it must file. Conversely (Q11), if there is no outstanding inward or outward FDI at end-March of the reporting year and the previous year, the return is not needed.
| Position on 31 March 2025 | Position on 31 March 2026 | FLA return due by 15 July 2026? |
|---|---|---|
| Foreign investor holds equity | Foreign investor still holds equity | Yes |
| Foreign investor holds equity | All non-resident shareholders exited | Yes: report last year's position and show the disinvestment for the current year |
| No FDI or ODI | Overseas subsidiary set up during the year | Yes |
| No FDI or ODI | Only share application money received from abroad | No, if nothing else is outstanding (FAQ Q12) |
| No FDI or ODI | No FDI or ODI | No |
Cases where the return is not required
- Only share application money: an entity that has received only share application money and has no outstanding FDI or ODI at end-March of the reporting year need not file (FAQ Q12).
- Non-repatriation shares: shares issued to a non-resident on a non-repatriable basis are not treated as foreign investment, so such companies are not required to file (FAQ Q17).
- Resident shareholder moves abroad: where a resident shareholder becomes non-resident, RBI says no FLA return is needed if all shares are held on a non-repatriation basis, but a return is required if the shares are repatriable (FAQ Q16).
The practical lesson: a non-resident name in the shareholder register does not settle the question. Classify each holding under FEMA first.
Due date and unaudited accounts
The return is due by 15 July of the reporting year, based on audited or unaudited financials (FAQ Q2). Because many statutory audits are not complete by mid-July, the FAQ (Q6) allows filing on provisional or unaudited figures within the due date. Once the audited accounts are ready, the entity must raise a request on FLAIR for permission to submit a revised return and, after approval, file the revised return.
RBI is explicit (Q35) that this revision is required "irrespective of any variation (amount/percentage) in the audited numbers." Even a small difference between provisional and audited figures therefore needs a revised filing.
Reference dates for entities with a different year-end
An entity whose accounting year does not end in March cannot report as per its own closing date (Q7). It must report for the reference period, the previous March and the latest March, based on internal assessment. This matters for Indian subsidiaries of groups with a December year-end and for overseas subsidiaries whose accounts close on a different date.
What to leave out
- Domestic assets and liabilities: any domestic asset or liability, even one denominated in foreign currency, should not be reported (Q34). A foreign-currency loan from an Indian bank is not an FLA item.
- Financial statements: no balance sheet or profit and loss account is attached; only the online return is submitted (Q14).
Worked example: filing before the audit is signed
An Indian private company has a Singapore investor holding 30 percent of its equity on repatriable terms on 31 March 2026. Its statutory audit will not finish until September 2026. The company files the FLA return on FLAIR by 15 July 2026 using its provisional March 2026 balance sheet. After the audit, it finds that the audited net worth differs from the provisional figure. It raises a revision request on FLAIR and, once RBI approves, files the revised return, even if the change is small.
Worked example: the foreign investor exited during the year
A company had foreign equity outstanding on 31 March 2025, but all non-resident shareholders sold to residents in December 2025. The company still files by 15 July 2026. Under FAQ Q15, it reports outstanding foreign liabilities as at end-March of the previous year and shows the current-year disinvestment in the appropriate fields of Section III of the return. Only in the following year, when neither March date carries FDI, does the obligation fall away.
Documents to assemble before logging in
- Entity details, FLAIR login credentials and the authorised signatory.
- Balance sheet positions for the previous March and latest March for foreign liabilities and foreign assets.
- Foreign investor details: country of the immediate investor, percentage holding, equity and participating preference capital and related cross-border balances.
- Overseas investment details: subsidiaries, associates or joint ventures abroad and related claims or liabilities.
- Operating data such as sales and purchases, following the FAQ's guidance on how non-trading entities should report them.
- The trail of any exit, transfer or disinvestment during the year.
- A note of whether the figures are provisional, with a reminder to revise after the audit.
The FAQ also covers valuation: it distinguishes the basis for listed and unlisted entities, so check the relevant question before filling in the equity figures.
Correcting or catching up on earlier years
RBI allows an entity to file the FLA return for previous years after taking RBI approval (Q8), and to delete or modify information submitted for an earlier period after approval (Q10), through the "Multiple Year CIN Enable" screen on FLAIR. A missed or wrong return should be regularised rather than left for the next cycle.
Consequences of missing 15 July
The FAQ (Q3) states that non-filing by the due date "will be treated as a violation of FEMA and penalty clause may be invoked." Separately, the 2019 reporting regulations make the person or entity responsible for a report liable to a late submission fee "as may be decided by the Reserve Bank, in consultation with the Central Government" for any delay. For payment of the late submission fee, the FAQ (Q9) directs entities to the Foreign Exchange Department of the relevant RBI Regional Office or the FIRMS helpdesk.
A short annual routine for finance teams
- By the end of April, run the two-date test for every group entity with any foreign shareholder or overseas investment.
- By the end of June, prepare provisional figures, since waiting for the audit is not a reason to miss 15 July.
- File by 15 July and diary the revision request for when audited accounts are signed.
- Keep the FEMA investment register, cap table, ODI records and March balances reconciled to what was filed.
Updated on 27 September 2026: added the regulation text and notification number, the entity categories, the non-repatriation and resident-turned-non-resident cases, AIF filing route, prior-year corrections, and a two-date applicability table, all checked against RBI's FAQ updated 1 July 2026.
