At the time of retirement of a partner the remaining gaining partners should compensate the........
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Retiring partners as well as remaining partners who have sacrificed
The partners who gain must pay every partner who gives up a share. The retiring partner always gives up his whole share. If the new ratio of the continuing partners leaves one of them with less than before, he too has sacrificed and must be compensated together with the retiring partner. This is the book’s own Test your Understanding item; its answer key gives (b), the same option.
Why the other options are incorrect
Option (1) Remaining partners only — Incorrect. It leaves out the retiring partner, who gives up his entire share.
Option (2) Retiring partners only — Incorrect. It leaves out a continuing partner whose share has fallen.
Option (4) Sacrificing partners only — Incorrect. It does not say that the retiring partner is compensated, though he sacrifices more than anyone.
NCERT (2026-27 edition):
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