(B) Only I, II and IV are correct.
Statement III is incorrect because the Constitution prohibits (not legalises) discrimination on grounds of religion.
Source: Democratic Politics II, Chapter 3 – Secular State
The passage clearly states four constitutional provisions: (1) no official religion, (2) freedom to profess/practice/propagate any religion, (3) prohibition of religious discrimination, and (4) state's right to intervene for equality within communities. Statement III wrongly says discrimination is "legal" — the Constitution says the opposite. Eliminate any option containing III; only option B remains correct.