diff --git a/hrms/hr/doctype/leave_encashment/leave_encashment.py b/hrms/hr/doctype/leave_encashment/leave_encashment.py
index b32f9ebd67..66481f6bea 100644
--- a/hrms/hr/doctype/leave_encashment/leave_encashment.py
+++ b/hrms/hr/doctype/leave_encashment/leave_encashment.py
@@ -204,7 +204,9 @@ def create_leave_ledger_entry(self, submit=True):
 			return
 
 		to_date = leave_allocation.get("to_date")
-		if to_date < getdate():
+
+		can_expire = not frappe.db.get_value("Leave Type", self.leave_type, "is_carry_forward")
+		if to_date < getdate() and can_expire:
 			args = frappe._dict(
 				leaves=self.encashment_days, from_date=to_date, to_date=to_date, is_carry_forward=0
 			)