The correct option is C Chromium sulphate is formed
When potassium iodide reacts with acidic solution of potassium dichromate, potassium dichromate liberates I2 from KI.
K2Cr2O7+7H2SO4+6KI→4K2SO4+Cr2(SO4)3+3I2+7H2O
Along with iodine, Potassium sulphate and chromium sulphate are also formed