Restricted holiday means a holiday that is optional, and it is the discretion of the employee whether they want to take leave on that particular day or not. Restricted holiday is also called an ‘Optional Holiday’ and it is not mandatory to close the entire office on that day. In general, a company’s list of restricted holidays may contain many days but the employee is only allowed to select his optional holidays (with a maximum limit attached) from the list and these holidays are only for employees, but not for companies or government offices. For example, Sri Ram Navami is only celebrated among Hindus, whereas Eid is celebrated among Muslims, so it’s up to the employees to take leave on restricted holiday.