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Foreign Asset and Liability Return Filing

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Foreign Asset and Liability Return Filing

Foreign Liabilities and Assets return (FLA) is to be filed by all those entities, that is, companies, partnership firms, trusts etc. who have received or made Foreign Direct Investment (FDI) from or to an entity registered outside India during the previous year. The return is to be mandatorily filed by such entities under Foreign Exchange and Management Act, 1999. The due date for filing return is 15th July of the relevant year based on audited or unaudited financial statements. Non-compliance can amount to penalty provided under Foreign Exchange and Management Act or FEMA, 1999.

Foreign Asset and Liability Return Filing process under FEMA

As per the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulation, 2000 a company is required to report details of FDI in Form No. FC-GPR. The form is to be submitted at regional Reserve Bank of India (RBI) office under which company's registered office operates within 30 days of issue of shares against investment received or made. The Form contains two separate sections, viz. Part A that relates to shares issued by Indian companies against FDI received and Part B relates to investment received through other modes. A company is required to file Foreign Asset and Liability Return returns even if it has not received any fresh FDI during the year but has filed a return in the previous year.

When filing is not required

A company doesn't have to file FLA returns under two conditions, viz.

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  1. The company doesn't have any outstanding investment, inward or outward, left by the end of the year, that is, 31st March; and
  2. The company that has issued shares to non-residents have transferred them to residents before year end.

The FLA return is to be filed in an Excel sheet in the format of FLA before the due date but it should not contain any annexes or attachments. In case the company has a query then it can contact the authorized person at RBI's regional office by e-mail or call.

The non-filing of Foreign Asset and Liability return can attract penalty under FEMA, 1999 and tax at a flat rate of 30% on undisclosed foreign assets as per Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.

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