In the event of retirement of partner, following deduction has to be made from his/her share...

Debit balance of his current account (if any)

The correct answer is option 1- Debit balance of his current account (if any).

In the event of retirement of partner, Debit balance of his current account (if any) is deducted from his/her share.

The sum due to the retiring partner (in case of retirement) and to the legal representatives/ executors (in case of death) includes:
(i) credit balance of his capital account; (ii) credit balance of his current account (if any); (iii) his share of goodwill; (iv) his share of accumulated profits (reserves); (v) his share in the gain of revaluation of assets and liabilities (vi) his share of profits up to the date of retirement/death; (vii) interest on his capital, if involved, up to the date of retirement/death; and (viii) salary/commission, if any, due to him up to the date of retirement/death.

The following deductions, if any, may have to be made from his share:
(i) debit balance of his current account (if any); (ii) his share of goodwill to be written off, if necessary; (iii) his share of accumulated losses; (iv) his share of loss on revaluation of assets and liabilities; (v) his share of loss up to the date of retirement/death; (vi) his drawings up to the date of retirement/death; (vii) interest on drawings, if involved, up to the date of retirement/death.