Essential Guide to Filing FLA Return for FY 2023-2024
The Reserve Bank of India (RBI) has extended the deadline for filing the Foreign Liabilities and Assets (FLA) Return for the financial year 2023-2024 to July 31, 2024. This extension offers a crucial reprieve for entities dealing with foreign investments, ensuring they have adequate time to comply with regulatory requirements. As a top NRI tax consultant in Mumbai, we aim to provide comprehensive insights into the FLA Return, its applicability, and the implications of non-compliance.
What is the FLA Return?
The FLA Return is a mandatory filing for all entities that have received Foreign Direct Investment (FDI) and/or made Overseas Direct Investment (ODI) in any of the previous years, including the current financial year. This return captures details about an entity’s foreign assets and liabilities, helping the RBI maintain accurate data on cross-border investments.
Applicability of FLA
The FLA Return applies to:
- All companies, partnerships, and LLPs that have received FDI and/or made ODI.
- Entities engaged in activities such as foreign collaborations, joint ventures, and foreign subsidiaries.
Entities must file the FLA Return annually, detailing their foreign liabilities and assets as of March 31 of the reporting year.
Filing the FLA Return: Audited vs. Unaudited Financial Statements
One common concern among entities is whether they need to have audited financial statements ready before filing the FLA Return. The good news is that the RBI allows entities to file the FLA Return with unaudited financial statements. Once the audited financial statements are available, entities can file a revised return. This flexibility ensures that the lack of audited statements does not hinder compliance.
Importance of Filing the FLA Return
Filing the FLA Return is not just a regulatory formality but a legal requirement under the Foreign Exchange Management Act (FEMA). Non-filing or delayed filing of the FLA Return by the due date (July 15 of every year) is considered a violation of FEMA. The consequences of such non-compliance can be severe, including the invocation of penalty clauses.
Consequences of Late Filing
Entities failing to file the FLA Return by the extended deadline of July 31, 2024, will be liable for penalties. The RBI, in consultation with the Central Government, has stipulated a Late Submission Fee (LSF) of INR 7,500 for delays in reporting. This fee underscores the importance of timely compliance and the RBI’s commitment to maintaining robust regulatory standards.
Can You File for Previous Years or Modify the FLA Return?
Yes, entities can file the FLA Return for previous years or modify/delete an already filed return. However, this requires prior approval from the RBI, which can be sought via email. This provision ensures that entities can rectify any discrepancies or update their filings in compliance with regulatory requirements.
Final Thoughts
As the deadline for filing the FLA Return approaches, it is crucial for all eligible entities to ensure timely and accurate submission.
Laabdhi, NRI tax consulting firm in Mumbai, assists clients in resolving the complexities of FLA return filing and other regulatory requirements. Our expertise ensures that your filings are accurate, timely, and in full compliance with FEMA regulations. Contact us for tailored guidance and support in managing your foreign asset liabilities effectively.