A Guide to Filing Your Foreign Liabilities and Assets Annual Return

The Foreign Liabilities and Assets Annual Return in India is a form which is required to be filed by an Indian resident who has any foreign assets or liabilities in the preceding year. The form can be submitted electronically or in person. The due date for filing the form is 31st March of the year following that in which the assets and liabilities were acquired or incurred.

The Foreign Liabilities and Assets Annual Return in India can be submitted by way of Form No. 44A, 44B, 44C, 44D and 44E. The form is primarily needed to be filed by resident individuals and businesses, who have foreign assets or liabilities, including accounts held in all foreign currency. Where an Indian resident has also entered into a contract in India for the sale of property, the form can be submitted by way of Form No. 44G.

Who needs to file a Foreign Liabilities and Assets Annual (FLA) Return?

In India, every individual who is a resident in India, other than an Indian citizen, is required to file a Foreign Liabilities and Assets Annual Return (FLA Return).

The FLA Return form is a one-page form that lists the assets held by the person abroad and any liabilities owed by them.

A person may have to file the FLA Return if they are:

• a foreign national living in India for more than 182 days in aggregate during the financial year

• a foreign national with assets or liabilities in India

• a foreign national with income from sources within India

• a person of Indian origin who has renounced their Indian citizenship.

Foreign Liabilities and Assets Annual Return Compliances

• The Foreign Liabilities and Assets Annual Return is a form that is used by people who have assets or liabilities in foreign countries.

• This form is filed every year by the person to the Indian Income Tax Department and it reports information about their foreign assets.

• FLA Return includes details of all income and expenditure from the previous year, along with details of any foreign investments made in that time period. It also includes any sales or purchases made outside India, as well as any transactions with a non-resident.

• FLA return must be filed within three years after the end of the financial year in which it applies to.

Are there any penalties for not filing a Foreign Liabilities and Assets Annual Return?

The Foreign Liabilities and Assets (FLA) Return is an annual return that must be filed by the Indian company in India. The due date for filing the FLA Return is 31st March every year.

The company failing to file the FLA return is liable to a penalty of thrice the case total amount involved in the contravention where the contravention is quantifiable. However, if the contravention is not quantifiable, then the business shall be liable to pay at least Rs. 2 lakhs for the contravention. Moreover, in case of continuing contravention, the company shall pay a penalty of Rs. 5000 per day.

Henceforth, it is important to comply with the requirements of FLA returns. In case of any clarification on FLA Return, please feel free to contact the ASC Group!