Withdrawal of recognition of provident funds triggers tax liability and loss of employer and employee deductions. Recognition of provident, superannuation and gratuity funds may be withdrawn for breach of recognition conditions, particularly nonpayment of employer or employee contributions. The Commissioner's office will verify compliance; trustees must be sent a prescribed annual letter within three months of each year-end and returns examined. If conditions are unmet, notices and show-cause proceedings must be issued, replies considered on merits, and, if warranted, an order withdrawing recognition passed. Withdrawal is effective on the date of the order and causes tax liability and loss of employee and employer deduction benefits.