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Decoding FLAs – Foreign Liabilities and Assets

Written By

Jitesh Agarwal, Priya Kapasi Shah

Published on

June 24,
2024

Last updated on

March 5, 2025
16:52

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https://treelife.in/finance/decoding-flas-foreign-liabilities-and-assets/

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AI Summary

FLA (Foreign Liabilities and Assets) reporting is an annual return mandated under Section 10(6) of the Foreign Exchange Management Act (FEMA), 1999, read with the relevant FEMA regulations on foreign investment reporting.
The Reserve Bank of India requires every Indian company, LLP, or other resident entity that has received foreign direct investment (FDI) or made overseas direct investment (ODI) in any previous year, including the current year, to file an FLA return.
Entities must report their foreign assets and liabilities as they stand on 31st March of the relevant financial year, even if the outstanding balance on that date is nil but transactions occurred during the year.
The FLA return must be filed annually by 15th July, based on either audited or provisional (unaudited) financial figures where audited accounts are not yet finalised.
Where the return is filed on an unaudited basis, entities must submit a revised FLA return with audited figures by 30th September of the same year.
Filing is done electronically through the RBI's FLAIR (Foreign Liabilities and Assets Information Reporting) portal, which requires prior user registration.
Companies and LLPs should reconcile FLA data with other FEMA filings such as FC-GPR, FC-TRS, and ODI forms to prevent inconsistencies that could trigger RBI queries.
Non-filing or incorrect filing of the FLA return is treated as a contravention under Section 13(1) of FEMA, 1999, attracting a penalty of up to three times the amount involved, or up to ₹2 lakh where the amount cannot be quantified.
A continuing contravention of FLA reporting requirements can invite an additional penalty of ₹5,000 per day for each day the default continues after the first day.

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Stay ahead of the curve with our insights on FLA reporting, mandated by the Reserve Bank of India (RBI) under the Foreign Exchange Management Act (FEMA),1999.

What is covered?
1. Understanding the purpose of FLA Reporting
2. Annual filing requirements for Indian companies and LLPs
3. Step-by-step guide to key FLA filing requirements
4. Penalties for non-compliance

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About the Author

Jitesh Agarwal

Founder | jitesh@treelife.in

Leads the VCFO, finance tax, and regulatory functions at Treelife. Responsible for the firm’s non-operational growth and providing strategic advisory in GIFT City, helping clients navigate complex regulatory landscapes effectively.

Priya Kapasi Shah

Associate Partner | Tax & Regulatory | priya.k@treelife.in

Heads Treelife’s Financial Advisory practice, specializing in investment structuring, cross-border transactions, and tax and regulatory advisory. Also leads on AIF setups and advisory services for GIFT IFSC.

Reviewed By

Jitesh Agarwal

Founder

Leads VCFO, finance, tax, and regulatory functions at Treelife. Advises on GIFT City structuring and strategic financial decisions for startups and scale-ups.