Tax deduction at source on lottery and race winnings requires flat-rate withholding with surcharge and strict compliance obligations. Tax must be withheld on winnings from lotteries, crossword puzzles and horse races where amounts exceed the exemption threshold, on gross winnings after commission-agent deduction, at the flat rate and with the surcharge specified in the Finance Act; specified exceptions apply for certain Sikkim lotteries. Withholders must provide prescribed certificates, quote TAN, file annual TDS returns on designated forms and remit deducted tax to Government within prescribed time, subject to administrative penalties and prosecution where statutory obligations are not met.