The correct option is B Rahul asked where he would go then.
When a sentence is changed from direct to indirect speech, the subject
pronoun, verbs and tense forms also change. (This is because the speech is reported by someone else, and the tense
of the direct speech goes one tense back as it's spoken at a later time
now.) The meaning of the sentence
should not be changed.
An interrogative sentence, when changed to
reported speech, does not function as an interrogative anymore. It turns into
a declarative sentence.
So, the word order of an interrogative changes to that of an assertive/declaratory sentence.
Option C: This sentence is the correct narration of the direct speech, as 'said' has changed to 'asked', to keep the meaning of the sentence intact. The question form 'will he' is changed to the declarative form 'he would'. 'Would' is the past tense form of 'will' in reported speech. Hence C is correct.
Option A is incorrect because the question form has not been changed; 'would he' must be changed to 'he would'.
Option B is incorrect because the tense of the verb 'will' has not been changed here. (When the reporting verb 'said' is in past tense, and the direct speech is in future tense, 'will' changes to 'would'.)
Option D is incorrect because the answer lies in C.