Missed Your FLA Deadline? Here’s What to Do (And How to Avoid RBI Penalties)

If you have missed your FLA return deadline, it is important to act quickly and follow the correct steps. The FLA return is a mandatory requirement under RBI regulations for Indian companies with foreign assets or liabilities. Delays or non-filing can lead to penalties under FEMA.

This guide outlines what the FLA return involves, the consequences of late filing, and the actions you can take to correct the situation and ensure compliance.

What Is the FLA Return?

The FLA return is a mandatory filing required by the RBI for all Indian companies that have received foreign investment or made investments abroad during the financial year for For example: If your Indian company received funds from a U.S. investor (FDI) or invested in a UK-based subsidiary (ODI) during the year, you are required to file the FLA return with the RBI. It covers:

• Foreign Direct Investment (FDI) received
• Overseas Direct Investment (ODI) made
• Any other foreign liabilities or assets

Even if your company didn’t make new transactions during the year but had existing foreign liabilities or assets on the balance sheet, you’re still required to file.

When Is the FLA Return Due?

The FLA return is due every year by July 15, based on your audited or provisional financials for the previous financial year ending March 31.

Missed the FLA Deadline? Here’s What Happens

1. You’re Non-Compliant with RBI Guidelines

Missing the FLA return makes your company non-compliant with RBI’s foreign exchange management reporting rules. This can impact your ability to raise future foreign capital or process further transactions with foreign investors.

2. You May Receive Notices from the RBI

If your company fails to submit the return, the RBI may flag it during routine audits or filings. In some cases, the RBI might send follow-up communications or notices requesting compliance.

3. Risk of Penalty Under FEMA

The FLA return is governed under FEMA, and non-compliance could lead to penalties under Section 13 of FEMA, which includes:

• Up to ₹2,00,000 for each non-compliance
• An additional penalty of ₹5,000 for each day the default continues after the first violation

The penalty amount can vary depending on the nature of the default and how long the return has been overdue.

Can You File the FLA Return Late?

Yes, but there’s a process.

The RBI’s online FLAIR system (Foreign Liabilities and Assets Information Reporting) does not allow you to submit late FLA returns directly once the portal closes after July 15.

Instead, you must:

1. Send a formal email to the RBI seeking permission to file late
2. Include your Company Name, CIN, FLA User ID, reason for delay, and attach supporting documents.
3. Once the RBI grants access, log in and complete the return on the FLAIR portal.

Important: Filing late without RBI approval is not accepted. Always wait for the RBI’s green light before submitting the delayed return.

How to Rectify Missed FLA Return Filing (Step-by-Step)

Step 1: Identify the Reason for Delay

Identify: Was it due to a lack of awareness? Staff turnover? Audited accounts delay? Mention this in your RBI email.

Step 2: Prepare the Return

Use provisional financials if audited ones are unavailable. Make sure to gather accurate information on all foreign liabilities and assets.

Step 3: Draft the Request Email to RBI

You can send the email to the RBI’s designated FLA support address flair@rbi.org.in. 

Step 4: Wait for Approval

The RBI may take a few days to review your request. Once approved, you’ll get temporary access to the FLAIR system.

Step 5: Submit the Return and Retain Proof

Download a copy of your filed return and the RBI’s approval email for your records. This is helpful in case of any future queries or audits.

How to Avoid FLA Filing Penalties Next Year

One missed deadline can cause serious compliance issues. Here’s how to prevent future delays

1. Add July 15 to Your Compliance Calendar

Set annual reminders well in advance. Start preparing the return as soon as the provisional financials are ready.

2. Assign Responsibility

Assign the FLA return task to your finance team or compliance officer, or outsource it to a professional service like LedgersCFO.

3. File Early to Avoid Last-Minute Problems

Try to file your FLA return as early as possible. The RBI’s FLAIR portal usually opens in April, so you don’t have to wait until the deadline and risk any delays or technical issues.

Need help with your FLA filing or RBI compliance? [Schedule a free consultation today.]

At LedgersCFO, we know how confusing it can be to manage RBI compliance, especially when it comes to FLA returns. Whether you’ve missed the deadline or are unsure how to rectify past filings, the fear of penalties can feel overwhelming.

That’s where we step in. Our experienced team helps Indian companies navigate every step of the FLA return process, from preparing accurate disclosures to communicating with the RBI on your behalf. We’ll help you resolve late filings, avoid further penalties, and stay fully compliant so you can focus on growing your global business with peace of mind.

FAQs

1. What is the penalty for missing the FLA return deadline?

Under FEMA, the penalty can be ₹2,00,000 for non-compliance and ₹5,000 per day of continuing default.

2. Can I file the FLA return after the July 15 deadline?

Yes, but only after receiving permission from the RBI by email.

3. Is the FLA return mandatory if my company received FDI but no transactions happened this year?

Yes. Even if there are no fresh transactions, existing foreign investments must be reported.

4. What if my audited financials aren’t ready?

You can file using provisional financials and later update with final numbers if needed.

5. How does LedgersCFO help with FLA return filing?

At LedgersCFO, we assist you with every step of the FLA filing process. From gathering the right financial details to preparing and submitting the return through the RBI’s FLAIR portal, our experts ensure everything is accurate and compliant. Whether you’re filing with audited numbers or estimates, we handle the work so you can stay focused on running your business.