A 2006 study published by Frederick Schneider on the shadow economies

SOLUTION:

(i) Majority of Germans evade tax and consider it as a trivial offense.
The given paragraph only tells us that majority (two-thirds) of the Germans surveyed regarded tax evasion as a trivial offence. It does not imply that two-thirds of the Germans actually evade tax. This statement is hence incorrect.

(ii) Both evading tax and stealing newspapers are considered a major crime in Germany
Stealing a newspaper is not a “bigger crime” in Germany. Whilst two-thirds of the Germans surveyed considered tax evasion as a trivial offence, only one-third thought that stealing a newspaper was a trivial offence. Clearly, this sentence is false.

(iii) As long as money is kept in India, illegal money is accepted by Indians as practical.
The paragraph states that tax- evaded money held within India is accepted as practical. This statement is hence TRUE.

(iv) Indians have considered tax evasion, especially illegal possession of foreign money, a serious crime.
A strong contender. It is clear from the paragraph that holding illicit money abroad is thought to be a serious crime in India.
However, the paragraph starts by discussing “tax morality” and the German view of it as a trivial offence. It further states that Indian tax morality is similar but makes a distinction based on where the illicit money is held. This implies that Indians generally regard tax evasion as a trivial offence too, as long as the illicit money is held in India. Tax evasion is considered a serious crime only when expatriate illicit money is held abroad. Hence this statement is incorrect.

So that cuts down to option B (only iii).

Hope the explanation helps!