Which of the following Indian classical dance forms uses various colours on face to symbolise the characters?

Kathakali

The correct answer is Option (2) - Kathakali 

• Kathakali is a classical dance form of Kerala.
• Kathakali is a blend of dance, music, and acting and dramatizes stories, which are mostly adapted from the Indian epics.
• The dancers enact the roles (kings, gods, demons, etc.) of the stories with particular make- up and costume, the vocalists narrate the legend and the percussionists play the musical instruments.
• Different facial colors indicate different mental stages & characters, e.g. green - nobility, black-wicked, red patches - combining royalty & evil.