Financial projection to an investor

Hi

We may help you with complete Projections and getting a Valuation report (for companies). We have handled various assignments on the same line.

Please consult personally.

Dear Sir,

Hope you are doing well !!

We may assist you in entire procedure.

We are handling the same cases. You can contact us personally.

Hello,

You can hire a practicing CA to create a financial proposal for your retail medical store.

You can contact us directly or take a phone consultation.

I hope that this answer satisfies your requirements.

Regards,

CA Hunny Badlani

Dear Sir,

Here are my replies to your question:

Case 1: Amount received from Investor Against Share Capital: If the investor gives you 1 crore against share capital than in that case the investor become the shareholder of the company and whatever will be the Net Profit of the company will also belong to that investor in the proportion to his share capital.

Like if the investor gives you 1 crore against 5% of the share capital then in that case 5 % of the Net Profit will be his return on the investment.

Impact in P/L : In this case impact will be given only at the time of distribution of Dividend. Dividend distributed will be deducted from profit of that particular year. 

Impact in BS : In this case no impact will be given.

Case 2: Amount received from Investor as Long Term Loan: If the investor gives you 1 crore as a long term loan at a certain percentage of interest then in that case that interest on loan will be his return on investment.

Impact in P/L : In this case impact will be given to profit every year while charging interest on Loan to Profit and Loss Account. It will be treated the way as interest on other Bank Loan treated in P/L. 

Impact in BS :It will be treated the way as interest on other Bank Loan treated in BS. 

Disclosure in Projected Financial Statement : You can represent the Return on Investment in the Financial Projection in a separate section " Ratio Analysis" which will contain all the analysis of the projected financial statement.

1. Ideally, financial projection should be for five years which comprises Profit & Loss account, balance sheet, cash flows. The estimation would depend on the detailed discussion with the you and it should not be arbitary. It is advisable to hire a CA.

GST applicability would depend upon whether liable to register under GST. If already registered under GST, GST at 18% would be charged at the rent for commercial property.

Regarding TDS, Individual & HUF assessee liable for tax audit and other assesses would be liable to deduct TDS if the total rent for a F.Y. exceeds Rs. 2,40,000 at the rate of 10%.

Hi

If you are receiving rent from commercial property and registered under GST, GST shall be chargeable.

However, if you are paying rent and the owner is not registered, no GST is to be paid.

Rent is applicable under section 194I @10% if annual rent exceeds 2.4 lacs. It is applicable if your accounts were audited in the previous year.

If your accounts were not audited, TDS is applicable under section 194IB if you are paying rent more than 50000 per month.

All individuals or HUFs (except those liable to audit under clause a and b of section 44AB) paying monthly rent to a resident in excess of Rs. 50,000 are liable to deduct TDS under section 194-IB

Deduct tax @ 5 % from the rent payment.

While preparing the projections, you need to present the estimated sales in the future, taking into account the expansion plan. accordingly costs and other matters. Its is a technical calculation and if you want we can work together for the same. 

Thanks 

- Rent is categorized as a services under the GST. For services, threshold limit for registration is Rs.20 lacs. In your case, annual rental income is below Rs.20 lacs therefore no GST is applicable.

- Under Income tax, TDS @10% u/s 194I needs to be deducted. 

Your Net profit before tax and after all other expense should give him more return than what he would get in open market i.e. your yearly return on his investment should be atleast 12-20% and you will pay interest to the investor which would be tax deductible so you will show profit before tax and after other expense.

Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.

Thank you.

Is 1.2 lakh per month or for year.

If 1.2 lakh per month: TDS under income tax yes, GST depends on the landlord, if no other income no GST.

If 1.2 lakh for whole year: no TDS and no GST.