Yes, the word ‘Sir’ should be capitalized when it is used as a formal title or when addressing someone directly. For example, in the context of a letter or conversation, saying ‘Dear Sir’ or ‘Thank you, Sir’ is correct. This shows respect and acknowledges the status of the person being addressed.
However, when ‘sir’ is used in a general sense or not as part of a title, it should remain in lowercase. For instance, in a sentence like ‘The man over there is a sir,’ the word is not being used as a title and therefore does not require capitalization.
In summary, capitalize ‘Sir’ when used as a title or in direct address, but use lowercase when it’s not serving that function.