The FLA return: who must file, what it asks for and how to file it on FLAIR

What the FLA return is

The Annual Return on Foreign Liabilities and Assets is a statistical return the Reserve Bank collects under the Foreign Exchange Management Act, 1999. It is the source of India's international investment position and of the direct investment figures RBI publishes each year. RBI's Master Direction on Reporting under FEMA sets out the return; the entity files it itself on the FLAIR portal (Foreign Liabilities and Assets Information Reporting), which replaced the old Excel form sent by email.

It is not an approval and carries no fee. What makes it matter is that not filing it, or filing it late, is a contravention of FEMA: the entity has to regularise the delay with RBI, through a late submission fee where RBI allows one or through compounding, and an entity with a gap in its FLA history finds later FEMA filings questioned.

Who must file, and who need not

The return is filed by every resident entity that has received foreign direct investment or made overseas direct investment in the reporting year or in any earlier year, and holds it on 31 March: companies (identified by CIN), limited liability partnerships (LLPIN), and other entities such as partnership firms, public-private partnerships and special purpose vehicles registered on FLAIR on an identifier RBI assigns. SEBI-registered Alternative Investment Funds report in RBI's Excel format by email rather than through the FLAIR form.

There is no return where nothing is outstanding on 31 March: an entity that never had FDI or ODI, one whose foreign investors exited before that date, one where foreign holdings are only on a non-repatriable basis, or one with only share application money pending allotment. A new company that received its first FDI on 2 April files from the following year.

The due dates for FY 2025-26

The return is due by 15 July each year for the position on 31 March. For the year ended 31 March 2026, RBI extended the due date on FLAIR to 31 July 2026 and moved its FLA correspondence to flareturn@rbi.org.in; the earlier address, surveyfla@rbi.org.in, is discontinued.

An entity whose accounts are not audited by the due date files on its unaudited (provisional) figures and then files a revised return on the audited accounts by 30 September. Revising a year already filed means asking RBI to re-open it on FLAIR first. Figures are always for 31 March: an entity with another accounting year reports the 31 March position on an internal assessment basis.

What the form asks for, block by block

Every amount is in rupees lakh, for both the previous and the latest 31 March.

• Section I, identification: name, address, PAN, CIN or LLPIN, contact person, account closing date, the NIC 2008 code of the business, any change of name during the year, whether listed (with the 31 March share price), and whether the entity is a subsidiary or associate of a foreign entity, a PPP or an SPV.
• Section II, financial details: paid-up capital by class (Block 1A) with the non-resident holdings by type of investor and their percentage of equity; profit and loss, dividend and retained profit (1B); reserves and net worth (1C); and, where a single foreign investor holds more than half, sales, exports, purchases and imports (1D).
• Section III, foreign liabilities: each direct investor holding 10% or more, one by one with its country (Block 2A); investors under 10%, one row per country (2B); and portfolio investment (2C). For each, equity capital and "other capital": trade credit, loans, debentures, non-participating preference shares and other payables and receivables with that investor.
• Section IV, foreign assets: each enterprise abroad held 10% or more, with its capital, reserves, net worth and the 31 March exchange rate (Block 3A) and the investment in it (4A); holdings under 10% by country (4B); portfolio investment abroad (Block 5); and, for enterprises held more than half, their sales, exports, purchases and imports in foreign currency (Section IV-A, outward FATS).
• Section V, other investment: trade credit, loans, currency and deposits and other receivables and payables with unrelated parties abroad (Block 6). FLAIR then shows a variation report against the previous year.

How the figures are valued

Equity is reported at market value. For a listed entity that is the share price on 31 March. For an unlisted one, which is most filers, it is the own funds at book value (OFBV) method: the entity's net worth, paid-up equity plus reserves and surplus including the profit and loss balance, multiplied by the investor's percentage holding. An Indian company with a net worth of ₹240 lakh that is 74% held by its foreign parent reports equity liabilities of ₹177.60 lakh to that parent. The same method values an unlisted enterprise abroad: its net worth in its own currency, times the share held, at the 31 March exchange rate.

Debt securities are at market value; loans, trade credit and other debt at nominal value. Domestic balances do not count even when they are in foreign currency: an EEFC account or a foreign-currency loan from an Indian bank is not a foreign liability or asset.

Common mistakes

• Stopping after the first year: the return is due every year the investment is held.
• Percentages that do not add up: the holdings placed in Blocks 2A, 2B and 2C must equal the non-resident share of equity in item 3.0.
• Reporting the ultimate parent's country instead of the immediate investor's.
• Equity at face value instead of OFBV, which FLAIR then contradicts in its own valuation.
• Leaving trade with the foreign parent or subsidiary in trade credit with unrelated parties, when it belongs in that investor's or enterprise's "other capital".
• Amounts in rupees instead of lakh, and a forgotten revision after filing on unaudited figures.

Preparing it from your records

Most of the return comes from the balance sheet, the shareholding register and the accounts of the enterprises abroad. The part that takes time is the positions with foreign parties on 31 March: what each overseas customer owed, what was due to each supplier abroad, the advances received and paid, split between the group's own companies and everyone else.

FxLayer's FLA return page (Compliance › Reports & registers) works through the form in FLAIR's order. It decides whether the return is due, starts each year from the last one, values equity at OFBV, and reads the open Shipping Bills, Bills of Entry, service invoices and unapplied remittances on each 31 March at that day's rate, putting the trade with the foreign parent or subsidiary in its other capital and the rest in trade credit. It runs FLAIR's consistency checks, gives the entry sheet in FLAIR's order to key in, and keeps the filing with its acknowledgement. The due date and the revision date sit on the compliance calendar. RBI publishes no API for FLAIR, so the return itself is submitted on the portal.

Questions

Sources

• RBI Master Direction: Reporting under Foreign Exchange Management Act, 1999 (updated 1 October 2026), including the Annual Return on Foreign Liabilities and Assets
• RBI FLAIR portal (Foreign Liabilities and Assets Information Reporting), where the FLA return is filed
• RBI notifications, including the A.P. (DIR Series) circulars to AD banks