diff --git a/hr/doctype/leave_application/leave_application.py b/hr/doctype/leave_application/leave_application.py
index 14c8b1f212..8a2df1e9c4 100755
--- a/hr/doctype/leave_application/leave_application.py
+++ b/hr/doctype/leave_application/leave_application.py
@@ -115,7 +115,8 @@ class DocType(DocListController):
 				self.doc.leave_balance = get_leave_balance(self.doc.employee,
 					self.doc.leave_type, self.doc.fiscal_year)["leave_balance"]
 
-				if self.doc.leave_balance - self.doc.total_leave_days < 0:
+				if self.doc.status != "Rejected" \
+						and self.doc.leave_balance - self.doc.total_leave_days < 0:
 					#check if this leave type allow the remaining balance to be in negative. If yes then warn the user and continue to save else warn the user and don't save.
 					msgprint("There is not enough leave balance for Leave Type: %s" % \
 						(self.doc.leave_type,),