Deduction of tax at source applies to lottery and race winnings exceeding exemption threshold, with high-rate withholding on gross winnings. Winnings from lotteries, crossword puzzles and horse races together with any casual and non-recurring receipts are exempt from TDS where their aggregate does not exceed Rs. 5,000 in a year; payments on or after 1-6-1986 that cause the aggregate to exceed that threshold require tax deduction at source at the rate of forty percent on the gross winnings, treating the exemption amount as protected under section 10(3); gross winnings mean the payment received after deduction of commission agent amounts.