Check both March reporting dates
The RBI’s annual Foreign Liabilities and Assets (FLA) return collects positions at the end of March for the current and preceding reporting years. It supports the compilation of India’s balance of payments and international investment position. The RBI’s July 2026 FAQs cover Indian-resident companies, LLPs and other entities including eligible partnership or proprietary firms, public-private partnerships and SEBI-registered alternative investment funds (AIFs) with outstanding inward foreign direct investment (FDI) or overseas direct investment (ODI).
| Position | Practical filing check |
|---|---|
| Outstanding qualifying inward FDI or ODI at either March reference date | File for the reporting period; no fresh transaction is necessary. Show disinvestment if the position closed during the year. |
| No outstanding inward FDI or ODI at either March date | Ordinarily no FLA return or separate nil return is needed solely on those facts. |
| Only share application money | It does not by itself trigger FLA filing under RBI’s FAQ. If otherwise required to file, classify the amount in the applicable schedule by counterparty relationship. |
| Only qualifying non-repatriable non-resident investment | RBI’s FLA FAQ does not treat it as foreign investment for this filing trigger. Check for other qualifying inward or outward positions. |
| Portfolio or other balances | Do not treat every foreign balance or portfolio holding as ODI. Once the filing requirement applies, disclose applicable portfolio and other positions in the proper fields. |
File by 15 July, then revise if filed on provisional numbers
For a covered entity the ordinary deadline is 15 July of the reporting year. Use the two March reference dates even if local financial statements or an overseas investee have a different accounting year; prepare March information on a supported basis. If audited accounts are not ready by the deadline, file using available provisional or unaudited figures. As soon as audited figures are available, request permission through FLAIR and file the revised return after approval. RBI’s July 2026 FAQ does not specify a universal 30 September cut-off or a minimum variance for revision. Check any separate direction for the relevant year.
Use the RBI’s FLAIR portal. New entity registration uses the verification and authority letters described in the RBI instructions. The authorised user receives credentials and files the return using the relevant reporting year and entity profile. The RBI FAQ does not require uploading the balance sheet or profit and loss statement with the return. Keep them as supporting records, and download the submission acknowledgement. The RBI’s current instructions provide a separate process for AIFs after registration: request the prescribed Excel format from the RBI FLA team and follow its submission and acknowledgement instructions.
For an old or revised filing use the relevant FLAIR request and obtain the RBI’s approval where required. For delayed filing or LSF instructions, check with the RBI Foreign Exchange Department regional office for the entity’s registered office.
Reconcile the form to the ledgers without forcing identical values
- Financial details: Reconcile Section II paid-up equity and participating preference share capital to the statutory records, using paid-up rather than fully diluted shares. Securities premium belongs in the applicable reserves field. The RBI form calculates net worth from equity and participating preference share capital and reserves and surplus. Follow its treatment of losses and avoid deducting an amount twice if already reflected in reserves.
- Inward positions: For unlisted equity, the RBI explains the own funds at book value (OFBV) method: eligible net worth multiplied by the investor’s ownership percentage. The nominal holding and statistical equity position are different. For listed equity follow the end-March market price instruction. Classify each direct investor, other direct-investment relationship and portfolio position in Section III. Use the immediate investor’s economy for equity and classify balances with a foreign ultimate parent or fellow enterprise separately where applicable.
- Outward positions: Reconcile Section IV equity and other capital separately. Apply the form’s reference date, currency and valuation instructions. An investee’s own funds and a group loan at nominal value can differ from the Indian parent’s historical cost and audited carrying value. Keep a bridge to the parent ledger, relevant overseas reporting and Annual Performance Report (APR) where applicable.
- Non-equity balances: Classify loans, trade credit and other payables by counterparty relationship, instrument and the form instructions. There is no general 180-day reclassification rule in the FLA guidance. Test ECB or trade-credit obligations under the separate rules. Domestic balances do not become external merely because denominated in foreign currency.
- Convertible instruments: Regulatory treatment as an equity instrument for inward investment does not determine the FLA field. RBI’s FLA instructions exclude compulsorily convertible debentures and comparable CCPS from Section II paid-up capital for the described reporting cases. Where the non-resident also holds equity, use the applicable other-capital field; if the investor holds only the convertible instrument, check the RBI’s portfolio debt-securities field. Keep a reconciliation to any FC-GPR and to the financial statements.
Seven worked illustrations
1. German parent: share premium and the unlisted equity position
An Indian subsidiary has 10,00,000 fully paid shares at ₹10 face value, issued at a premium of ₹90 per share. Its German parent holds 100%. There are no other eligible adjustments. At 31 March 2024:
| Item | Amount | Meaning |
|---|---|---|
| Paid-up capital | ₹1 crore | 10,00,000 × ₹10; also the nominal value of the parent’s shares |
| Securities premium | ₹9 crore | 10,00,000 × ₹90; include in the reserves field |
| General reserve and retained earnings | ₹2.40 crore and ₹5.80 crore | Total reserves including premium: ₹17.20 crore |
| OFBV equity position | ₹18.20 crore | 100% × (₹1 crore + ₹17.20 crore); a face-value-only estimate would be lower by ₹17.20 crore |
Sales of ₹45 crore do not determine the equity position or prove that a portal rejection would occur.
2. US parent: trade payables and age
A wholly owned unlisted subsidiary has ₹50 lakh paid-up capital and ₹4.20 crore applicable own funds, plus ₹8.60 crore payable to its US parent for software and services. ₹5.40 crore is older than 210 days; the balance is ₹3.20 crore. Assuming the amounts are all external and reportable and no other positions exist, reconcile ₹4.20 crore of inward equity and the full ₹8.60 crore of other capital, or ₹12.80 crore gross. An age split may support internal review but does not convert only the older amount into a reportable liability. Check separately whether trade-credit or other requirements apply.
3. Dubai subsidiary: investment cost, own funds and intercompany loan
Assume the Indian parent owns 100% and invested USD 500,000 at ₹83 per USD (₹4.15 crore historical cost). Its wholly outstanding USD 200,000 loan is ₹1.66 crore at an assumed reference-date ₹83 per USD. The foreign subsidiary has AED 2.20 million of eligible own funds at March-end. At an assumed ₹22.64 per AED, its 100% equity position is ₹4,98,08,000 (about ₹4.98 crore). Under these assumptions, equity and loan together are ₹6,64,08,000. Report in the applicable separate fields and units; the rates are illustrative, and the equity position need not equal historical cost. Reconcile the difference with the standalone accounts and relevant ODI records.
4. Late submission: use the periodic-return fee
Assume the 15 July 2024 deadline applies, and the entity files on 15 November 2024, 123 days later. Under the RBI’s September 2022 matrix, a delayed FLA return falls in the ₹7,500 flat-fee category for periodic reports; there is no ₹1,000 monthly charge in that category. The RBI circular generally makes the LSF option available up to three years from the reporting due date, subject to the applicable conditions. Follow the RBI’s advice; a calculated amount is not proof that the delay has been regularised.
5. Consolidation translation reserves
An Indian parent has a ₹68 lakh foreign currency translation reserve in its consolidated accounts after translating a London subsidiary under Ind AS 21. Determine the reporting entity, the subsidiary’s eligible own funds, the March reference date and currency. Do not add the parent’s ₹68 lakh consolidated OCI balance to the subsidiary’s local equity merely to match the Indian balance sheet. In a bridge where the only proposed reconciling item is that parent reserve, the inappropriate increase would be ₹68 lakh; the approved adjustment for that reason alone is nil.
6. Foreign investor holds only CCPS
A startup receives USD 4 million for 0.001% compulsorily convertible preference shares, or ₹33.20 crore at an illustrative ₹83 per USD. Assume the startup must file FLA on other qualifying positions, the investor holds only these CCPS on the reference date and ₹33.20 crore is their reportable nominal outstanding amount, with no issue premium. Apply the RBI’s CCPS guidance for the portfolio debt-securities field in that circumstance; do not present them as paid-up equity for the statistical form merely because they are classified as equity instruments for inward-investment regulation. If the investor also owns equity, revisit the related other-capital field. An issue price that includes premium need not equal the reportable nominal amount.
7. FC-GPR, FC-TRS and closing ownership
Assume a company issues 5,00,000 new ₹10-face-value shares to a non-resident at ₹100 each and an Indian founder separately sells 2,00,000 existing ₹10-face-value shares to another non-resident at ₹100 each. Assume no prior foreign holding or later movements, a post-issue total of 19,55,000 shares and that the stated reporting forms apply.
| Event | Cash consideration | Ledger or ownership effect |
|---|---|---|
| Primary issue (FC-GPR) | ₹5 crore to the company | ₹50 lakh new paid-up capital and ₹4.50 crore premium |
| Secondary sale (FC-TRS) | ₹2 crore to the selling shareholder | ₹20 lakh nominal holding moves from resident to non-resident; total company share capital is unchanged |
| Closing position | ₹7 crore aggregate transaction consideration | 7,00,000 foreign-held shares, ₹70 lakh nominal capital and about 35.8% ownership; value each investor’s closing equity under the form instructions |
The company’s register, filings and RBI position should explain the same transactions. The three rupee measures do not have to match.
Practical filing checklist
Confirm the two March dates and filing scope; reconcile paid-up equity, reserves and foreign counterparties; prepare valuation and currency bridges; reconcile FC-GPR, FC-TRS, applicable overseas reporting and other compliance records without substituting them for FLA; and retain the submitted return and acknowledgement. Accounting tools can help assemble the reconciliation. The responsible team should review the classifications and file through the route the RBI specifies.
Frequently asked questions
1. When is FLA normally due?
By 15 July. Check for any RBI direction for the relevant year. If overdue, obtain the applicable filing and fee instructions.
2. Can I file with unaudited figures?
Yes, to meet the deadline. Request permission and revise when audited figures are available, without using a minimum materiality threshold to avoid revision.
3. Does late filing automatically freeze FIRMS or stop all remittances?
The FLA guidance does not establish that automatic consequence. Delay can be a FEMA contravention, subject to the applicable LSF or enforcement process. Section 13 penalties are determined through adjudication and Section 42 governs when company officers may be liable. Check any separate restriction applicable to the underlying transactions.
4. Does share application money alone trigger the return?
No, where the entity has no otherwise reportable outstanding FDI or ODI. When a return is required, the applicable Section III field depends on whether the investor already holds equity and on the prescribed relationship classification.
5. How do I report a transfer or exit?
Reconcile both March positions and report a disinvestment where required. Check the register and any required FC-TRS independently. A zero current-year position does not remove the need to check the prior-year position.
6. Can a software reconciliation replace FLAIR submission?
No. Use software to prepare and reconcile the records; follow the applicable RBI filing process and retain the acknowledgement.
Sources
- RBI FLA FAQs updated 1 July 2026: filing scope, timing and valuation
- RBI FLAIR FAQs updated 25 March 2026: filing workflow and field instructions
- FEMA 395/2019-RB: reporting of non-debt investments and Form FLA
- RBI A.P. (DIR Series) Circular 16 of 30 September 2022: late submission fee
- Foreign Exchange Management Act, 1999: Sections 13 and 42
- ICAI compendium: notified Ind AS 21, foreign operations and translation differences