{"id":14380,"date":"2020-08-05T18:08:19","date_gmt":"2020-08-05T12:38:19","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=14380"},"modified":"2024-07-02T14:23:17","modified_gmt":"2024-07-02T08:53:17","slug":"analysis-on-foreign-liabilities-and-assets-fla-return-under-fema","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/analysis-on-foreign-liabilities-and-assets-fla-return-under-fema\/","title":{"rendered":"Analysis on Foreign Liabilities and Assets: (FLA Return) under FEMA"},"content":{"rendered":"\n<p class=\"has-drop-cap\">The FLA Return is described as Foreign Liabilities And Assets Return, which is required to be submitted by all the Indian Companies which have been received Foreign Direct Investment (FDI) or made Overseas Investment abroad in the previous years, including the current year, i.e., who holds foreign Assets or Liabilities in their Balance Sheets. <\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/analysis-on-foreign-liabilities-and-assets-fla-return-under-fema\/#What_is_FLA_Return\" >What is FLA Return?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/analysis-on-foreign-liabilities-and-assets-fla-return-under-fema\/#Who_required_filing_it\" >Who required filing it?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/analysis-on-foreign-liabilities-and-assets-fla-return-under-fema\/#Companies_Exempted_from_Filing_FLA_Return\" >Companies Exempted from Filing FLA Return<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/analysis-on-foreign-liabilities-and-assets-fla-return-under-fema\/#Due_Date_of_Filing_FLA_Return\" >Due Date of Filing FLA Return<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/corpbiz.io\/learning\/analysis-on-foreign-liabilities-and-assets-fla-return-under-fema\/#How_to_file_Form-_FLA_Return\" >How to file Form- FLA Return?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/corpbiz.io\/learning\/analysis-on-foreign-liabilities-and-assets-fla-return-under-fema\/#Penalty_if_no_FLA_Return_filed\" >Penalty if no FLA Return filed<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/corpbiz.io\/learning\/analysis-on-foreign-liabilities-and-assets-fla-return-under-fema\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_FLA_Return\"><\/span>What is FLA Return?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong><em>Annual return on the Foreign Liabilities and Assets has been notified under the FEMA Act 1999.<\/em><\/strong> It must be submitted by all the Indian resident companies which have received FDI and made overseas investment in any of the last years, including the current year <strong><em>by 15 July every year<\/em><\/strong>. The non-filing of a return before the due date will be treated as the violation of FEMA and penalty clause will be invoked for violation of FEMA.<\/p>\n\n\n\n<p>When the companies involve themselves with foreign investments, it becomes important to follow the rules and regulations of the (<a href=\"https:\/\/corpbiz.io\/fema-compliance\"><strong>FEMA<\/strong><\/a>) Foreign Exchange Management Act and the compliances thereunder. FLA return is one of the most necessary compliance that has to be met by the companies that have either received FDI or made ODI.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/covid-19-measures-taken-by-mca-for-businesses-in-india-2020\/\">COVID-19: Overall Measures taken by MCA for businesses in India, 2020<\/a><\/mark><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Who_required_filing_it\"><\/span>Who required filing it?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong>Entities are required to file FLA Return are stated below:<\/strong><\/p>\n\n\n\n<ul>\n<li>A Company which falls within the meaning of <strong><em>section 1(4) of the Companies Act, 2013<\/em><\/strong><\/li>\n\n\n\n<li>A <a href=\"https:\/\/corpbiz.io\/llp-registration\"><strong>Limited Liability Partnership<\/strong><\/a> is registered under the <strong><em>Limited Liability Partnership Act, 2008<\/em><\/strong><\/li>\n\n\n\n<li>Others, <strong><em>including SEBI<\/em><\/strong>, <a href=\"https:\/\/corpbiz.io\/alternative-investment-fund-registration\"><strong>registered Alternative Investment Funds<\/strong><\/a> (AIFs), Partnership Firms, Public-Private Partnerships (PPP), Branches, or Trustees.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Companies_Exempted_from_Filing_FLA_Return\"><\/span>Companies Exempted from Filing FLA Return<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul>\n<li>Companies that have only issued shares on a\nnon-repatriable basis to India&#8217;s non-residents are exempt from filing FLA\nreturn.&nbsp; <\/li>\n\n\n\n<li>By the end of the financial year, companies that\ndo not have any outstanding balance of FDI or ODI are exempt from filing FLA\nreturn.<\/li>\n\n\n\n<li>Companies that have only received share\napplication money and have not received any FDI or not made any ODI are exempt\nfrom filing FLA return.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Due_Date_of_Filing_FLA_Return\"><\/span>Due Date of Filing FLA Return<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>FLA return is mandatory under the FEMA Act 1999, and companies\nare required to submit the same based on audited\/ unaudited accounts by 15 July\nevery year. <strong><em>However, for submitting Form FLA for the FY 2019-20, the due date has\nbeen extended to 31 July 2020.<\/em><\/strong><\/p>\n\n\n\n<p>If a company&#8217;s accounts are not audited before the due date\nof submission, i.e., 15 July, the FLA Return must be submitted based on an\nunaudited (provisional) account. Once the accounts get audited, and there are\nrevisions from the company&#8217;s provisional information, they are supposed to\nsubmit a revised FLA return based on audited accounts by the end \u2013 Sept, i.e., <strong><em>30\nSeptember of the year<\/em><\/strong>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_to_file_Form-_FLA_Return\"><\/span>How to file Form- FLA Return?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter\"><img decoding=\"async\" width=\"657\" height=\"338\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/08\/image-17.png\" alt=\"FLA Return\" class=\"wp-image-14381\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/08\/image-17.png 657w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/08\/image-17-300x154.png 300w\" sizes=\"(max-width: 657px) 100vw, 657px\" \/><\/figure><\/div>\n\n\n<p>The Reserve Bank of India has operationalized the web-based\nsystem online reporting portal for Foreign Liabilities and Assets Information\nReporting system for submission of foreign liabilities and assets FLA return by\n15 July of every year. This replaces the current email-based reporting system\nfor the submission of the FLA return.<\/p>\n\n\n\n<p><strong><em>The main features of a FLAIR system are as follows:<\/em><\/strong><\/p>\n\n\n\n<ol>\n<li>FLA return is to be submitted by the entities that have received foreign direct investment and made an overseas investment: <\/li>\n\n\n\n<li>Reporting entities must create a login name and password and register themselves on the web portal: https:\/\/flair.rbi.org.in.<\/li>\n\n\n\n<li>The existing mechanism of an email-based submission of FLA forms will be discontinued.<\/li>\n\n\n\n<li>The directions have come into force and would be applicable for reporting information, i.e., FLA return due on 15 July. It also needs to be filed on the new portal.<\/li>\n\n\n\n<li>RBI&#8217;s FAQs in this regard provide that RBI approval would be required if an entity wants to<\/li>\n\n\n\n<li>File the FLA return beyond a due date or file the returns for any previous years.<\/li>\n\n\n\n<li>Delete or modify the previous version of the FLA return.<\/li>\n\n\n\n<li>Indian entities that do not comply with it will be treated as a defaulter under the Foreign Exchange Management Act and the regulations made hereunder.<\/li>\n<\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Penalty_if_no_FLA_Return_filed\"><\/span>Penalty if no FLA Return filed<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>There are no specific penalties for FLA, as per Circular No.\n29, dated 02 February 2017), however Non-filing of the FLA return before the\ndue date will be treated as the violation of FEMA and penalty will be levied on\ndefaulters which must be\u2013<\/p>\n\n\n\n<ul>\n<li>If an amount against which offence is quantifiable, then <strong><em>a penalty will be &#8220;THRICE&#8221; the sum<\/em><\/strong> involved in the contravention.<\/li>\n\n\n\n<li>Where an amount cannot be quantified, the penalty may be imposed up to <strong><em>2 lakh rupees. <\/em><\/strong><\/li>\n\n\n\n<li>If any contravention is continuing every day, then <strong><em>Rs. 5000 for every day after a first day<\/em><\/strong> during which the contravention continues&nbsp; <\/li>\n<\/ul>\n\n\n\n<p>Further, in addition to a penalty, any currency, security,\nor other money or property involved in the contravention may also be\nconfiscated.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p> FLA&#8217;s annual return should cover all the foreign investments made by the company and to the company, and the company must directly submit it to the Reserve Bank of India. The details filed must comprise the financial details and other required details in accordance with the companies audited accounts. The details filed must comprise the financial details and other required details in accordance with the companies&#8217; audited accounts. We at <a href=\"https:\/\/corpbiz.io\/\"><strong>CorpBiz <\/strong><\/a>help our clients keep the accounts, and like other services, we help them file the return.  <\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/5-actionable-strategies-to-secure-your-finances-amid-covid-19\/\">5 Actionable Strategies to secure your finances amid COVID-19<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The FLA Return is described as Foreign Liabilities And Assets Return, which is required to be submitted by all the Indian Companies which have been received Foreign Direct Investment (FDI) or made Overseas Investment abroad in the previous years, including the current year, i.e., who holds foreign Assets or Liabilities in their Balance Sheets. What [&hellip;]<\/p>\n","protected":false},"author":10,"featured_media":14382,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[844],"tags":[843],"acf":{"service_id":"112"},"authorName":"Soumya Bajpai","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/01\/0.jpg","authorDescription":"Soumya has done LLB (Hons) and has a 2+years experience in writing. Her main interest is in reading judgments, new enactments and amendments taking around in law. She always strives to bring the best to work that she does.","postViews":9677,"readingTime":4,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/14380"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=14380"}],"version-history":[{"count":12,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/14380\/revisions"}],"predecessor-version":[{"id":65062,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/14380\/revisions\/65062"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/14382"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=14380"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=14380"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=14380"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}