diff --git a/erpnext/hr/doctype/leave_application/leave_application.py b/erpnext/hr/doctype/leave_application/leave_application.py
index b33bd54..23514e1 100755
--- a/erpnext/hr/doctype/leave_application/leave_application.py
+++ b/erpnext/hr/doctype/leave_application/leave_application.py
@@ -5,8 +5,8 @@
 import frappe
 from frappe import _
 from frappe.utils import cint, cstr, date_diff, flt, formatdate, getdate, get_link_to_form, \
-	comma_or, get_fullname
-from erpnext.hr.utils import set_employee_name
+	comma_or, get_fullname, add_days
+from erpnext.hr.utils import set_employee_name, get_leave_period
 from erpnext.hr.doctype.leave_block_list.leave_block_list import get_applicable_block_dates
 from erpnext.hr.doctype.employee.employee import get_holiday_list_for_employee
 
@@ -15,6 +15,7 @@
 class InvalidLeaveApproverError(frappe.ValidationError): pass
 class LeaveApproverIdentityError(frappe.ValidationError): pass
 class AttendanceAlreadyMarkedError(frappe.ValidationError): pass
+class NotAnOptionalHoliday(frappe.ValidationError): pass
 
 from frappe.model.document import Document
 class LeaveApplication(Document):
@@ -31,6 +32,8 @@
 		self.validate_block_days()
 		self.validate_salary_processed_days()
 		self.validate_attendance()
+		if frappe.db.get_value("Leave Type", self.leave_type, 'is_optional_leave'):
+			self.validate_optional_leave()
 
 	def on_update(self):
 		if self.status == "Open" and self.docstatus < 1:
@@ -207,6 +210,19 @@
 			frappe.throw(_("Attendance for employee {0} is already marked for this day").format(self.employee),
 				AttendanceAlreadyMarkedError)
 
+	def validate_optional_leave(self):
+		leave_period = get_leave_period(self.from_date, self.to_date, self.company)
+		if not leave_period:
+			frappe.throw(_("Cannot find active Leave Period"))
+		optional_holiday_list = frappe.db.get_value("Leave Period", leave_period[0]["name"], "optional_holiday_list")
+		if not optional_holiday_list:
+			frappe.throw(_("Optional Holiday List not set for leave period {0}").format(leave_period[0]["name"]))
+		day = getdate(self.from_date)
+		while day <= getdate(self.to_date):
+			if not frappe.db.exists({"doctype": "Holiday", "parent": optional_holiday_list, "holiday_date": day}):
+				frappe.throw(_("{0} is not in Optional Holiday List").format(formatdate(day)), NotAnOptionalHoliday)
+			day = add_days(day, 1)
+
 	def notify_employee(self):
 		employee = frappe.get_doc("Employee", self.employee)
 		if not employee.user_id:
diff --git a/erpnext/hr/doctype/leave_application/test_leave_application.py b/erpnext/hr/doctype/leave_application/test_leave_application.py
index 424da90..e71357c 100644
--- a/erpnext/hr/doctype/leave_application/test_leave_application.py
+++ b/erpnext/hr/doctype/leave_application/test_leave_application.py
@@ -5,8 +5,9 @@
 import frappe
 import unittest
 
-from erpnext.hr.doctype.leave_application.leave_application import LeaveDayBlockedError, OverlapError
+from erpnext.hr.doctype.leave_application.leave_application import LeaveDayBlockedError, OverlapError, NotAnOptionalHoliday, get_leave_balance_on
 from frappe.permissions import clear_user_permissions_for_doctype
+from frappe.utils import add_days, nowdate
 
 test_dependencies = ["Leave Allocation", "Leave Block List"]
 
@@ -225,55 +226,54 @@
 
 		frappe.db.set_value("Leave Block List", "_Test Leave Block List",
 			"applies_to_all_departments", 0)
-	
+
 	def test_optional_leave(self):
-		''''''
 		leave_period = get_leave_period()
-		today = get_today()
-		
+		today = nowdate()
+		from datetime import date
 		holiday_list = frappe.get_doc(dict(
 			doctype = 'Holiday List',
-			name = 'test holiday list for optional holiday',
-			from_date = year_start_date(),
-			to_date = year_end_date(),
+			holiday_list_name = 'test holiday list for optional holiday',
+			from_date = date(date.today().year, 1, 1),
+			to_date = date(date.today().year, 12, 31),
 			holidays = [
 				dict(holiday_date = today, description = 'test')
 			]
-		))
+		)).insert()
 		employee = get_employee()
-		
-		frappe.db.set_value('Employee', employee, 'holiday_list', holiday_list)
-		
+
+		frappe.db.set_value('Leave Period', leave_period.name, 'optional_holiday_list', holiday_list.name)
+
 		leave_type = frappe.get_doc(dict(
 			leave_type_name = 'Test Optional Type',
 			doctype = 'Leave Type',
-			is_optional_leave = 1,
-			holiday_list = holiday_list
+			is_optional_leave = 1
 		)).insert()
-		
+
 		allocate_leaves(employee, leave_period, leave_type.name, 10)
-		
-		date = get_today() - 1
-				
+
+		date = add_days(today, - 1)
+
 		leave_application = frappe.get_doc(dict(
 			doctype = 'Leave Application',
-			employee = employee,
+			employee = employee.name,
 			leave_type = leave_type.name,
 			from_date = date,
 			to_date = date,
 		))
-		
+
 		# can only apply on optional holidays
 		self.assertTrue(NotAnOptionalHoliday, leave_application.insert)
-		
+
 		leave_application.from_date = today
 		leave_application.to_date = today
+		leave_application.status = "Approved"
 		leave_application.insert()
 		leave_application.submit()
-		
+
 		# check leave balance is reduced
-		self.assertEqual(get_leave_balance(employee, leave_period, leave_type.name), 9)
-		
+		self.assertEqual(get_leave_balance_on(employee.name, leave_type.name, today), 9)
+
 	def test_leaves_allowed(self):
 		# TODO: test cannot allocate more than max leaves
 		pass
@@ -285,7 +285,7 @@
 	def test_max_continuous_leaves(self):
 		# TODO: test cannot take continuous leaves more than
 		pass
-		
+
 	def test_earned_leave(self):
 		leave_period = get_leave_period()
 		employee = get_employee()
@@ -297,14 +297,14 @@
 			earned_leave_frequency = 'Monthly',
 			rounding = 0.5
 		)).insert()
-		
+
 		allocate_leaves(employee, leave_period, leave_type.name, 0, eligible_leaves = 12)
-		
+
 		# this method will be called by scheduler
 		allocate_earned_leaves(leave_type.name, leave_period, as_on = half_of_leave_period)
-		
+
 		self.assertEqual(get_leave_balance(employee, leave_period, leave_type.name), 6)
-		
+
 
 def make_allocation_record(employee=None, leave_type=None):
 	frappe.db.sql("delete from `tabLeave Allocation`")
@@ -319,4 +319,4 @@
 	})
 
 	allocation.insert(ignore_permissions=True)
-	allocation.submit()
\ No newline at end of file
+	allocation.submit()
diff --git a/erpnext/hr/doctype/leave_period/leave_period.json b/erpnext/hr/doctype/leave_period/leave_period.json
index 946ceec..516d52d 100644
--- a/erpnext/hr/doctype/leave_period/leave_period.json
+++ b/erpnext/hr/doctype/leave_period/leave_period.json
@@ -41,7 +41,6 @@
    "reqd": 1, 
    "search_index": 0, 
    "set_only_once": 0, 
-   "translatable": 0, 
    "unique": 0
   }, 
   {
@@ -72,7 +71,6 @@
    "reqd": 1, 
    "search_index": 0, 
    "set_only_once": 0, 
-   "translatable": 0, 
    "unique": 0
   }, 
   {
@@ -102,7 +100,6 @@
    "reqd": 0, 
    "search_index": 0, 
    "set_only_once": 0, 
-   "translatable": 0, 
    "unique": 0
   }, 
   {
@@ -134,7 +131,6 @@
    "reqd": 1, 
    "search_index": 0, 
    "set_only_once": 0, 
-   "translatable": 0, 
    "unique": 0
   }, 
   {
@@ -165,7 +161,37 @@
    "reqd": 0, 
    "search_index": 0, 
    "set_only_once": 0, 
-   "translatable": 0, 
+   "unique": 0
+  }, 
+  {
+   "allow_bulk_edit": 0, 
+   "allow_on_submit": 0, 
+   "bold": 0, 
+   "collapsible": 0, 
+   "columns": 0, 
+   "fieldname": "optional_holiday_list", 
+   "fieldtype": "Link", 
+   "hidden": 0, 
+   "ignore_user_permissions": 0, 
+   "ignore_xss_filter": 0, 
+   "in_filter": 0, 
+   "in_global_search": 0, 
+   "in_list_view": 0, 
+   "in_standard_filter": 0, 
+   "label": "Holiday List for Optional Leave", 
+   "length": 0, 
+   "no_copy": 0, 
+   "options": "Holiday List", 
+   "permlevel": 0, 
+   "precision": "", 
+   "print_hide": 0, 
+   "print_hide_if_no_value": 0, 
+   "read_only": 0, 
+   "remember_last_selected_value": 0, 
+   "report_hide": 0, 
+   "reqd": 0, 
+   "search_index": 0, 
+   "set_only_once": 0, 
    "unique": 0
   }, 
   {
@@ -196,7 +222,6 @@
    "reqd": 0, 
    "search_index": 0, 
    "set_only_once": 0, 
-   "translatable": 0, 
    "unique": 0
   }, 
   {
@@ -227,7 +252,6 @@
    "reqd": 0, 
    "search_index": 0, 
    "set_only_once": 0, 
-   "translatable": 0, 
    "unique": 0
   }, 
   {
@@ -259,7 +283,6 @@
    "reqd": 0, 
    "search_index": 0, 
    "set_only_once": 0, 
-   "translatable": 0, 
    "unique": 0
   }, 
   {
@@ -291,7 +314,6 @@
    "reqd": 0, 
    "search_index": 0, 
    "set_only_once": 0, 
-   "translatable": 0, 
    "unique": 0
   }, 
   {
@@ -323,7 +345,6 @@
    "reqd": 0, 
    "search_index": 0, 
    "set_only_once": 0, 
-   "translatable": 0, 
    "unique": 0
   }, 
   {
@@ -355,7 +376,6 @@
    "reqd": 0, 
    "search_index": 0, 
    "set_only_once": 0, 
-   "translatable": 0, 
    "unique": 0
   }, 
   {
@@ -386,7 +406,6 @@
    "reqd": 0, 
    "search_index": 0, 
    "set_only_once": 0, 
-   "translatable": 0, 
    "unique": 0
   }, 
   {
@@ -416,7 +435,6 @@
    "reqd": 0, 
    "search_index": 0, 
    "set_only_once": 0, 
-   "translatable": 0, 
    "unique": 0
   }, 
   {
@@ -447,7 +465,6 @@
    "reqd": 0, 
    "search_index": 0, 
    "set_only_once": 0, 
-   "translatable": 0, 
    "unique": 0
   }
  ], 
@@ -461,7 +478,7 @@
  "issingle": 0, 
  "istable": 0, 
  "max_attachments": 0, 
- "modified": "2018-04-14 13:29:57.066314", 
+ "modified": "2018-05-04 18:25:06.719932", 
  "modified_by": "Administrator", 
  "module": "HR", 
  "name": "Leave Period", 
@@ -470,6 +487,7 @@
  "permissions": [
   {
    "amend": 0, 
+   "apply_user_permissions": 0, 
    "cancel": 0, 
    "create": 1, 
    "delete": 1, 
@@ -489,6 +507,7 @@
   }, 
   {
    "amend": 0, 
+   "apply_user_permissions": 0, 
    "cancel": 0, 
    "create": 1, 
    "delete": 1, 
@@ -508,6 +527,7 @@
   }, 
   {
    "amend": 0, 
+   "apply_user_permissions": 0, 
    "cancel": 0, 
    "create": 1, 
    "delete": 1, 
diff --git a/erpnext/hr/doctype/leave_type/leave_type.json b/erpnext/hr/doctype/leave_type/leave_type.json
index 1d1aef20..aad7e7b 100644
--- a/erpnext/hr/doctype/leave_type/leave_type.json
+++ b/erpnext/hr/doctype/leave_type/leave_type.json
@@ -41,7 +41,6 @@
    "reqd": 1, 
    "search_index": 0, 
    "set_only_once": 0, 
-   "translatable": 0, 
    "unique": 0
   }, 
   {
@@ -73,7 +72,6 @@
    "reqd": 0, 
    "search_index": 0, 
    "set_only_once": 0, 
-   "translatable": 0, 
    "unique": 0
   }, 
   {
@@ -104,7 +102,6 @@
    "reqd": 0, 
    "search_index": 0, 
    "set_only_once": 0, 
-   "translatable": 0, 
    "unique": 0
   }, 
   {
@@ -136,7 +133,6 @@
    "reqd": 0, 
    "search_index": 0, 
    "set_only_once": 0, 
-   "translatable": 0, 
    "unique": 0
   }, 
   {
@@ -166,7 +162,6 @@
    "reqd": 0, 
    "search_index": 0, 
    "set_only_once": 0, 
-   "translatable": 0, 
    "unique": 0
   }, 
   {
@@ -198,7 +193,6 @@
    "reqd": 0, 
    "search_index": 0, 
    "set_only_once": 0, 
-   "translatable": 0, 
    "unique": 0
   }, 
   {
@@ -228,7 +222,36 @@
    "reqd": 0, 
    "search_index": 0, 
    "set_only_once": 0, 
-   "translatable": 0, 
+   "unique": 0
+  }, 
+  {
+   "allow_bulk_edit": 0, 
+   "allow_on_submit": 0, 
+   "bold": 0, 
+   "collapsible": 0, 
+   "columns": 0, 
+   "fieldname": "is_optional_leave", 
+   "fieldtype": "Check", 
+   "hidden": 0, 
+   "ignore_user_permissions": 0, 
+   "ignore_xss_filter": 0, 
+   "in_filter": 0, 
+   "in_global_search": 0, 
+   "in_list_view": 0, 
+   "in_standard_filter": 0, 
+   "label": "Is Optional Leave", 
+   "length": 0, 
+   "no_copy": 0, 
+   "permlevel": 0, 
+   "precision": "", 
+   "print_hide": 0, 
+   "print_hide_if_no_value": 0, 
+   "read_only": 0, 
+   "remember_last_selected_value": 0, 
+   "report_hide": 0, 
+   "reqd": 0, 
+   "search_index": 0, 
+   "set_only_once": 0, 
    "unique": 0
   }, 
   {
@@ -258,7 +281,6 @@
    "reqd": 0, 
    "search_index": 0, 
    "set_only_once": 0, 
-   "translatable": 0, 
    "unique": 0
   }, 
   {
@@ -288,7 +310,6 @@
    "reqd": 0, 
    "search_index": 0, 
    "set_only_once": 0, 
-   "translatable": 0, 
    "unique": 0
   }, 
   {
@@ -319,7 +340,6 @@
    "reqd": 0, 
    "search_index": 0, 
    "set_only_once": 0, 
-   "translatable": 0, 
    "unique": 0
   }, 
   {
@@ -350,7 +370,6 @@
    "reqd": 0, 
    "search_index": 0, 
    "set_only_once": 0, 
-   "translatable": 0, 
    "unique": 0
   }, 
   {
@@ -382,7 +401,6 @@
    "reqd": 0, 
    "search_index": 0, 
    "set_only_once": 0, 
-   "translatable": 0, 
    "unique": 0
   }, 
   {
@@ -413,7 +431,6 @@
    "reqd": 0, 
    "search_index": 0, 
    "set_only_once": 0, 
-   "translatable": 0, 
    "unique": 0
   }, 
   {
@@ -445,7 +462,6 @@
    "reqd": 0, 
    "search_index": 0, 
    "set_only_once": 0, 
-   "translatable": 0, 
    "unique": 0
   }, 
   {
@@ -478,102 +494,6 @@
    "reqd": 0, 
    "search_index": 0, 
    "set_only_once": 0, 
-   "translatable": 0, 
-   "unique": 0
-  }, 
-  {
-   "allow_bulk_edit": 0, 
-   "allow_on_submit": 0, 
-   "bold": 0, 
-   "collapsible": 1, 
-   "columns": 0, 
-   "fieldname": "section_break_13", 
-   "fieldtype": "Section Break", 
-   "hidden": 0, 
-   "ignore_user_permissions": 0, 
-   "ignore_xss_filter": 0, 
-   "in_filter": 0, 
-   "in_global_search": 0, 
-   "in_list_view": 0, 
-   "in_standard_filter": 0, 
-   "label": "Optional Leave", 
-   "length": 0, 
-   "no_copy": 0, 
-   "permlevel": 0, 
-   "precision": "", 
-   "print_hide": 0, 
-   "print_hide_if_no_value": 0, 
-   "read_only": 0, 
-   "remember_last_selected_value": 0, 
-   "report_hide": 0, 
-   "reqd": 0, 
-   "search_index": 0, 
-   "set_only_once": 0, 
-   "translatable": 0, 
-   "unique": 0
-  }, 
-  {
-   "allow_bulk_edit": 0, 
-   "allow_on_submit": 0, 
-   "bold": 0, 
-   "collapsible": 0, 
-   "columns": 0, 
-   "fieldname": "is_optional_leave", 
-   "fieldtype": "Check", 
-   "hidden": 0, 
-   "ignore_user_permissions": 0, 
-   "ignore_xss_filter": 0, 
-   "in_filter": 0, 
-   "in_global_search": 0, 
-   "in_list_view": 0, 
-   "in_standard_filter": 0, 
-   "label": "Is Optional Leave", 
-   "length": 0, 
-   "no_copy": 0, 
-   "permlevel": 0, 
-   "precision": "", 
-   "print_hide": 0, 
-   "print_hide_if_no_value": 0, 
-   "read_only": 0, 
-   "remember_last_selected_value": 0, 
-   "report_hide": 0, 
-   "reqd": 0, 
-   "search_index": 0, 
-   "set_only_once": 0, 
-   "translatable": 0, 
-   "unique": 0
-  }, 
-  {
-   "allow_bulk_edit": 0, 
-   "allow_on_submit": 0, 
-   "bold": 0, 
-   "collapsible": 0, 
-   "columns": 0, 
-   "depends_on": "is_optional_leave", 
-   "fieldname": "holiday_list", 
-   "fieldtype": "Link", 
-   "hidden": 0, 
-   "ignore_user_permissions": 0, 
-   "ignore_xss_filter": 0, 
-   "in_filter": 0, 
-   "in_global_search": 0, 
-   "in_list_view": 0, 
-   "in_standard_filter": 0, 
-   "label": "Holiday List", 
-   "length": 0, 
-   "no_copy": 0, 
-   "options": "Holiday List", 
-   "permlevel": 0, 
-   "precision": "", 
-   "print_hide": 0, 
-   "print_hide_if_no_value": 0, 
-   "read_only": 0, 
-   "remember_last_selected_value": 0, 
-   "report_hide": 0, 
-   "reqd": 0, 
-   "search_index": 0, 
-   "set_only_once": 0, 
-   "translatable": 0, 
    "unique": 0
   }, 
   {
@@ -604,7 +524,6 @@
    "reqd": 0, 
    "search_index": 0, 
    "set_only_once": 0, 
-   "translatable": 0, 
    "unique": 0
   }, 
   {
@@ -635,7 +554,6 @@
    "reqd": 0, 
    "search_index": 0, 
    "set_only_once": 0, 
-   "translatable": 0, 
    "unique": 0
   }, 
   {
@@ -668,7 +586,6 @@
    "reqd": 0, 
    "search_index": 0, 
    "set_only_once": 0, 
-   "translatable": 0, 
    "unique": 0
   }, 
   {
@@ -701,7 +618,6 @@
    "reqd": 0, 
    "search_index": 0, 
    "set_only_once": 0, 
-   "translatable": 0, 
    "unique": 0
   }
  ], 
@@ -716,7 +632,7 @@
  "issingle": 0, 
  "istable": 0, 
  "max_attachments": 0, 
- "modified": "2018-04-14 14:36:46.824289", 
+ "modified": "2018-05-03 19:42:23.852331", 
  "modified_by": "Administrator", 
  "module": "HR", 
  "name": "Leave Type", 
@@ -724,6 +640,7 @@
  "permissions": [
   {
    "amend": 0, 
+   "apply_user_permissions": 0, 
    "cancel": 0, 
    "create": 1, 
    "delete": 1, 
@@ -743,6 +660,7 @@
   }, 
   {
    "amend": 0, 
+   "apply_user_permissions": 0, 
    "cancel": 0, 
    "create": 1, 
    "delete": 1, 
@@ -762,6 +680,7 @@
   }, 
   {
    "amend": 0, 
+   "apply_user_permissions": 0, 
    "cancel": 0, 
    "create": 0, 
    "delete": 0,