The Reserve Bank of India (RBI) on July 01, 2026, issued FAQs on the Annual Return on Foreign Liabilities and Assets (FLA) under FEMA, 1999.
The following has been stated:
• The FAQs clarify that all Indian resident entities, including companies, LLPs, partnership firms, proprietary firms, SEBI-registered Alternative Investment Funds (AIFs), Public Private Partnerships (PPPs), and other eligible entities having outstanding Foreign Direct Investment (FDI) and/or Overseas Direct Investment (ODI) as on 31st March of the previous or current financial year are required to file the annual FLA Return under FEMA, 1999.
• The return shall be submitted through the RBI's FLAIR portal by 15 July each year using audited or provisional financial statements. If audited accounts are not available by the due date, entities may file using unaudited figures but shall submit a revised return after obtaining RBI approval once the audited financial statements are finalized. Failure to file the return within the prescribed timeline is treated as a violation of FEMA and may attract penalties, including a Late Submission Fee (LSF).
• The FAQs further explain that the FLA Return captures information on foreign liabilities and assets for compiling India's Balance of Payments (BoP), International Investment Position (IIP), and international investment statistics. Filing is not required where an entity has no outstanding inward or outward FDI as of the end of both the current and previous financial years, or where only non-repatriable investments or share application money without outstanding FDI exist.
• The guidance also clarifies reporting requirements for FDI, ODI, reverse investments, related-party transactions, valuation methodologies for listed and unlisted entities, reporting of debt instruments under "Other Capital," and treatment of preference shares, compulsorily convertible debentures, and IFSC-related investments.
• In addition, the FAQs prescribe procedures for filing revised or previous years' returns, updating entity details, reporting sales and purchases based on normal business operations, and emphasize that only the FLA Return is required to be submitted without attaching financial statements.
