If I send sMerit to someone if I noticed some deserving post, then it will be deducted from my merit balance?
What you send is sMerit, sendable merit, not merit so logically you won't lose your merit, what you lose is sendable (sMerit) but you don't get any benefit by holding your sMerit.
Read more to understand more about merit system.
You can always try to click on Merit to see the message
You have received a total of X merit. This is what determines your forum rank. You typically cannot lose this merit. You have Y sendable merit (sMerit) which you can send to other people. There is no point in hoarding sMerit; keeping it yourself does not benefit you, and we reserve the right to decay unused sMerit in the future.