diff --git a/erpnext/accounts/doctype/pricing_rule/pricing_rule.json b/erpnext/accounts/doctype/pricing_rule/pricing_rule.json
index f73fb10d320..29d83783d07 100644
--- a/erpnext/accounts/doctype/pricing_rule/pricing_rule.json
+++ b/erpnext/accounts/doctype/pricing_rule/pricing_rule.json
@@ -1,5 +1,4 @@
 {
- "actions": [],
  "allow_import": 1,
  "allow_rename": 1,
  "autoname": "field:title",
@@ -390,8 +389,7 @@
    "fieldname": "rate_or_discount",
    "fieldtype": "Select",
    "label": "Rate or Discount",
-   "options": "\nRate\nDiscount Percentage\nDiscount Amount",
-   "reqd": 1
+   "options": "\nRate\nDiscount Percentage\nDiscount Amount"
   },
   {
    "default": "Grand Total",
@@ -440,7 +438,7 @@
   },
   {
    "default": "0",
-   "depends_on": "eval:!doc.mixed_conditions && doc.price_or_product_discount == 'Price'",
+   "depends_on": "eval:!doc.mixed_conditions && doc.apply_on != 'Transaction'",
    "fieldname": "same_item",
    "fieldtype": "Check",
    "label": "Same Item"
@@ -556,8 +554,7 @@
  ],
  "icon": "fa fa-gift",
  "idx": 1,
- "links": [],
- "modified": "2019-12-13 15:48:48.331495",
+ "modified": "2019-12-18 17:29:22.957077",
  "modified_by": "Administrator",
  "module": "Accounts",
  "name": "Pricing Rule",
diff --git a/erpnext/accounts/doctype/pricing_rule/pricing_rule.py b/erpnext/accounts/doctype/pricing_rule/pricing_rule.py
index 03641028e6f..5fd933b3d98 100644
--- a/erpnext/accounts/doctype/pricing_rule/pricing_rule.py
+++ b/erpnext/accounts/doctype/pricing_rule/pricing_rule.py
@@ -48,6 +48,9 @@ class PricingRule(Document):
 		if tocheck and not self.get(tocheck):
 			throw(_("{0} is required").format(self.meta.get_label(tocheck)), frappe.MandatoryError)
 
+		if self.price_or_product_discount == 'Price' and not self.rate_or_discount:
+			throw(_("Rate or Discount is required for the price discount."), frappe.MandatoryError)
+
 	def validate_applicable_for_selling_or_buying(self):
 		if not self.selling and not self.buying:
 			throw(_("Atleast one of the Selling or Buying must be selected"))
diff --git a/erpnext/public/js/controllers/transaction.js b/erpnext/public/js/controllers/transaction.js
index 877a243967c..c735f840769 100644
--- a/erpnext/public/js/controllers/transaction.js
+++ b/erpnext/public/js/controllers/transaction.js
@@ -500,6 +500,9 @@ erpnext.TransactionController = erpnext.taxes_and_totals.extend({
 								() => {
 									var d = locals[cdt][cdn];
 									me.add_taxes_from_item_tax_template(d.item_tax_rate);
+									if (d.free_item_data) {
+										me.apply_product_discount(d.free_item_data);
+									}
 								},
 								() => me.frm.script_manager.trigger("price_list_rate", cdt, cdn),
 								() => me.toggle_conversion_factor(item),