The Voluntary Surrender of Salaries (Exemption from Taxation) Act, 1961
Administered Ministry: Ministry of Finance / Department of Revenue
Act details
| Short title | The Voluntary Surrender of Salaries (Exemption from Taxation) Act, 1961 |
|---|---|
| Long title | An Act to provide for exempting from taxes on income a portion of the salary or allowances payable to any person who has in the public interest volunteered to forego it. |
| Act number | 46 of 1961 |
| Act year | 1961 |
| Enactment date | 6 Dec 1961 |
| Ministry | Ministry of Finance / Department of Revenue |
| Department | Department of Revenue |
| Jurisdiction | Central (Parliament of India) |
| Sections | 5 |
| Status | Not repealed |
| Last checked on India Code | 4 Nov 2026 |
| Source | India Code, Government of India |
Summary
Summary of the Voluntary Surrender of Salaries (Exemption from Taxation) Act, 1961
Key Provisions
1. Exemption from Income Tax: - Salaries Surrendered in Public Interest: No income-tax or super-tax shall be payable on the portion of the salary voluntarily surrendered in the public interest by an individual, if:
• Paid out of the Consolidated Fund of India or a State, and surrendered after 31st March 1961 via a written declaration.
• Surrendered to the Central Government in accordance with rules, in other cases.
• Such surrendered salary shall not be included in the total income for taxation purposes.
2. Application to Allowances: - Provisions of Section 2 (regarding exemption) also apply to allowances due after 31st March 1961.
3. Administrative Provisions
• Power to Make Rules: Central Government can make rules to carry out the Act's purposes, subject to parliamentary oversight.
• Repeal: Repeals the Voluntary Surrender of Salaries (Exemption from Taxation) Act, 1950, with a provision for declarations under the repealed Act to be deemed valid under this Act.
Legislative history
Legislative History:
The Voluntary Surrender of Salaries (Exemption from Taxation) Act, 1961
● Act Title - The Voluntary Surrender of Salaries (Exemption from Taxation) Act, 1961
● Act Number / Year - 46 of 1961
● Act ID (India Code) - 196146
● Presidential Assent Date - December 6, 1961
● Enforcement Date - December 6, 1961
● Nodal Ministry - Ministry of Finance
Precedent & Historical Rationale
● Tax Relief for Philanthropic and Public-Interest Surrenders - Enacted to provide tax exemptions on salaries voluntarily surrendered by constitutional post-holders, public servants, and employees in favor of the Central Government or public interest, ensuring surrendered income is excluded from taxable gross income.
● Repeal and Consolidation of Previous Enactments - Formulated to replace and modernize the Voluntary Surrender of Salaries (Exemption from Taxation) Act, 1950, aligning tax-exemption rules with updated provisions of the Income-tax Act, 1961.
Parliamentary Trajectory & Enactment
● Formulation - Introduced by the Ministry of Finance to streamline statutory provisions governing tax-exempt voluntary salary foreclosures.
● Parliamentary Passage - Debated and passed by both Houses of Parliament (Second Lok Sabha and Rajya Sabha) during the November–December 1961 session.
● Presidential Assent - Received Presidential Assent on December 6, 1961.
● Enforcement - Enforced on December 6, 1961.
Source - Official Record of Parliament, India Code, and Ministry of Finance.