The Parliament formulated, The Dadra and Nagar Haveli Act, 1961 on September 2, 1961 and was enforced on the same date when the 10th Amendment was implemented. The Constitution of India was amended in 1961 by enacting The Constitution (Tenth Amendment) Act, 1961 which was implemented by retrospective operation on August 11, 1961. It was framed to embrace 7th Union Territory by altering Schedule 1 within India known as Dadra and Nagar Haveli. The Act further amended Article 240(1) to add the said Union Territory. After the enactment, the Union Territory got account in the Indian Parliament. The governance of the territory also got Constitutional validity. The Administrator is appointed to the Union Territory as per Article 239 of the Indian Constitution with the power on the President to conduct the appointment.
In the Lok Sabha, single seat shall be allocated to the Dadra and Nagar Haveli. The Schedule 1 of the Constitution subsequent to 1st entry shall be amended. The entries 22 as well as 23 shall be numbered accordingly. The Act also amends the Representation of the People Act, 1951. From the date of initiation of the legislation, the Varishta Panchayat has been granted the right to converse and create suggestions to the Administrator on the subjects of governance that consists of policy decisions and strategies of advancement and other issues which are carried over to the administrator. Such rights are given till another law is made in this regard. The main responsibilities and tasks that are assigned to the Panchayat in this Act is mere advisory and the advice given by the body shall be taken into consideration by the administrator while settling on matters on the governance of the Union Territory. The Act, rules or regulations that are prepared by the Panchayat shall be void for the rationale that the presence of the positions between the people or imperfection in the Constitution. All the people of the Panchayat who are members shall prior to the compliance with their responsibilities under the present Act, promise in front of the administrator an undertaking or declaration in the manner prescribed under Section 4 of the enactment.

The judicial officers as well as other officials who were already serving the Dadra and Nagar Haveli are given permission under the Act to continue their office even after getting the status of the Union Territory. This provision shall not affect he authority of the Government of India to appoint officials and other members essential for the governance. The officers shall hold the office till another law is being framed in this connection. The properties of the Panchayat or with the administrator shall stand transferred to the Central Government. The privileges and obligations held on the Panchayat or that vests with the administrator shall be assigned with the Government of India. The laws that are implemented in the Dadra and Nagar Haveli prior to the pioneering of the enactment shall have force in the Union Territory until the Acts are annulled or altered by the Union. The revenues, excise duties or any other charges that were collected shall be collected by the Central Government. The jurisdiction exercisable by the High Courts in Bombay to the newly created Union Territory as well. Where any complexity happens in implementing the enactment or with the governance of the Union Territory, the Central Government shall take measures to take out such complexities. The Central Government shall formulate rules to continue with the successful realization of the Act. The rules shall deal with the vacancies that occur in the Panchayat, performance of functions and the mode of conducting meetings, other issues related with the Union Territory etc. The rules so framed shall be laid before the Lok Sabha and Rajya Sabha within the period specified in the enactment.