Rusting of iron is a physical change.
Chemical change: A permanent change in which new substances are formed whose chemical and physical properties are completely different from that those of the original substance.
Physical change: A temporary change, in which no new substance is formed and the chemical composition of the original substance remains the same, even though some of its physical properties like color, state, shape, size, etc. may change.
Hence, the given statement i.e. rusting of iron is a physical change is false.