Ceramic Pb0.97La0.02Zr0.52Ti0.48O3 has been prepared by sol–gel synthesis followed by atmospheric sintering. Sintering has been done at temperatures between 1150 and 1300 °C for the duration of 20–180 min. Comparative studies on microstructure, ferroelectric properties, dielectric response, piezoelectric coefficient and strain behavior have been carried out on the basis of sintering condition to find out the missing link between several earlier reports and establish the optimum condition for sintering. The optimum sintering parameters, which balance the grain growth, defects in microstructure and Pb-loss are found. Bipolar and unipolar strains are computed from dielectric constant, piezoelectric coefficients and polarization. It has been observed that sintering at higher temperatures for longer duration increases grain size; which is desirable but simultaneously develops defects in microstructure and increases Pb-loss. Quantitative analysis on Pb-loss has been examined by energy dispersive X-ray spectroscopy (EDS). Pb-loss creates Pb and O vacancies, which affect the optical properties. A systematic band gap decrement and increasing defect induced photoluminescence (PL) emissions are observed with increasing Pb-loss. A band gap change from 3.414 eV (sintering at 1150 °C for 20 min) to 3.182 eV (sintering at 1300 °C for 180 min) is observed while the corresponding Pb-loss is 1.5–23.7%. The band gap decrement follows a nearly linear relation with Pb-loss. © 2018, Springer Science+Business Media, LLC, part of Springer Nature.