The need of Codification is :

The correct answer is Option (1) → For Encryption of data

This question, with its four options, is multiple choice question 8 at the end of the NCERT chapter on computerised accounting, and the book’s own answer list gives (a), “The Encryption of data”. The answer given by NTA follows the book.

Read NCERT’s chapter-end questions and their answer lists along with the chapter; NTA copies them word for word.