At the time of retirement of a Partner, gain on revaluation will be credited to:

Capital A/c of all Partners in their old Profit Sharing ratio

The correct answer is Option (2) → Capital A/c of all Partners in their old Profit Sharing ratio.

When a partner retires, the gain on revaluation of assets and liabilities is credited to the capital accounts of all partners (both the retiring and the remaining partners). This is done in the old profit-sharing ratio because the revaluation reflects the partnership’s position before the retirement and is shared among all the partners according to their existing profit-sharing ratio. This ensures that the revaluation gain or loss is appropriately distributed among all partners before the retirement of the partner.