Dear Ekta,
I believe your estt. is located in Maharashtra and therefore you should follow minimum of what has been provided in the The Bombay Shops & Establishmentt Act (for whole of Maharashtra) . More days of leave also can be considered. But you have to satisfy what is as per the Act. For declaring holidays you should follow holidays declared by the state govt. for every calendar year. For this minimum is 3 national holidays and other local state holidays you may decide, discretion is yours. Extract of leave rules from the Act is as follows:
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CHAPTER VII
Leave with Pay and Payment of Wages
35. Leave.-(1)(a) Subject to the provisions of clause (b), every employee who has been employed for not less than three months in any year, shall for every 60 days on which he has worked during the year be allowed leave, consecutive or
otherwise, for a period of not more than five days:
(b) every employee who has worked for not less than two hundred and forty days during a year [irrespective of the date of commencement of his service,] shall be allowed leave, consecutive or otherwise, for a period of not less than twenty-one days: Provided that such leave may be accumulated up to a maximum period of forty two days. Explanation:-The leave allowed to an employee under clauses (a) and (b) shall be inclusive of the day or days during the period of such leave, on which a shop,
or commercial establishment remains closed under sub-section (1) of section 18, or on which he is entitled to a holiday under sub-section (1) of section 24 or section 31.]
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(2) If an employee entitled to leave under sub-section (1) [or (1-A)] is discharged by his employer before he has been allowed the leave, or if, having applied for and having been refused the leave, he quits his employment before he has been allowed the leave, the employer shall pay him the amount payable under section 36 in respect of the leave.
(3) If an employee entitled to leave under sub-section (1) [or (1-A) is refused the leave, he may give intimation to the Inspector or any other officer authorised in this behalf by the [State] Government regarding such refusal. The Inspector shall enter such intimation in a register kept in such form as may be prescribed.
16 [The employee shall also send a copy of such intimation to his employer and, thereupon, the employee shall be entitled to carry forward the unavailed leave without any limit.
(4) Notwithstanding anything contained in this section, every employee, irrespective of his period of employment, shall be entitled to additional holiday on the 26th January, 1st May, 15th August and 2nd October every year. For holiday on these days, he shall be paid wages at a rate equivalent to the daily average of his wages (excluding overtime), which he earns during the month in which such compulsory holidays falls:
Provided that the employer may require any employee to work in the establishment on all or any of these days, subject to the conditions that for such work the employee shall be paid double the amount of the daily average wages and also leave on any other day in lieu of the compulsory holiday.
36. Pay during leave.-Every employee shall be paid for the period of his leave at a rate equivalent to the daily average of his wages for the days on which he actually worked during the preceding three months, exclusive of any earnings in respect of overtime.
37. Payment when to be made.-An employee who has been allowed leave
under section 35 shall, before his leave begins, be paid half the total amount due
to him for the period of such leave.
The Bare act of this Act is attached. You may refer as get it updated and use.