China’s criminal law has a long tradition of setting up the clause of voluntary surrender and exemption from punishment, and exemption from punishment by voluntary surrender is based on the theories of human nature, normativity, and efficiency, and the precise application of the clause has three functions: implementing the concept of leniency, conforming to the orientation of crime prevention and saving judicial resources. There are two ways to apply the clause in China: conviction but exemption from punishment and exemption from punishment for guilt. The former represents a substantive avenue for release from criminal liability, whereas the latter constitutes a procedural avenue for exoneration. In practice, there are problems in the application of the clause by judicial organs, such as unreasonable methods, inconsistent standards, unclear logic and low rate of separate application, which make it difficult for the clause to give full play to its unique value. The reason is that the judicial interpretation interprets the premise of the application of the clause—the crime is relatively minor—as the circumstances of the crime are relatively minor, which makes the clause become a vassal of other exemption clauses and loses its status as an independent system, and in turn leads to the application of the clause only by the method of estimation. Between application or non-application, the clause is reduced to a tool for compromise treatment. With the advent of the era of misdemeanors, the number of misdemeanor cases continues to increase, and the disadvantages of punishment with consequences have gradually emerged, which has further exacerbated the contradictions between leniency of punishment, crime prevention and saving judicial resources. Compared with other exemption clauses, the voluntary surrender and exemption from punishment clause is the most cost-effective, most morally demanding, and easiest incentive clause to limit the initiation of criminal punishment, and should be actively applied. First of all, it is necessary to improve the application mode of the clause, characterize the clause as a special provision or legal fiction, and change the existing comprehensive application model to a mode of comprehensive application + separate application. Secondly, the crime is relatively minor should be interpreted as committing a misdemeanor without the aggravating circumstance of a preventive sentence, since the legislature has already taken into account the social harmfulness of the act when setting the statutory sentence, and the fixed-term imprisonment of less than three years is a dividing line of many systems in the Criminal Law and the Criminal Procedure Law, it is appropriate to define the scope of misdemeanors with the statutory sentence of three years imprisonment. Thirdly, the discretionary logic of the clause should change from calculating the statutory mitigating circumstances before calculating other circumstances to calculating the base sentence first according to the responsibility penalty + then calculating the mitigating circumstances of the preventive sentence + finally calculating the aggravating circumstances of the preventive sentence. Finally, based on the theory of human nature, normativity, and efficiency, the types of voluntary surrender that apply the clause should be perfected. They should be limited to those characterized by timeliness, initiative, and sincerity, while excluding situations where voluntary surrender is maliciously exploited to evade legal sanctions.