Tds from company's point of veiw

A very happy evening to all of you guys out there. Please help me out on this query at your earliest.

The question is -

A company is making a provision for leave encashment to provide for the retiring employees. Now my query is simple, how is the TDS to be treated here ? Does the company need to provide a provision for TDS on the above provision also ? Or does the company need to deduct the appropoate TDS on the provision amount or the more likely one is the company deducts TDS at the time of payment of Leave Encashment ?

Prompt reply will be much appreciated.

Thanks.