Step 1: About the 12th Schedule.
The 12th Schedule of the Indian Constitution was added by the 74th Constitutional Amendment Act (1992). It deals with the powers, authority, and responsibilities of municipalities.
Step 2: Analyzing the options.
(A) Jurisdiction of municipality: Correct — covers functions like urban planning, water supply, sanitation, slum improvement, etc.
(B) Income sources of municipal corporation: Not the specific subject of the 12th Schedule.
(C) Directive principles of state: Related to Part IV, not the 12th Schedule.
(D) Fundamental rights: Covered in Part III.
Step 3: Conclusion.
The 12th Schedule is directly related to Jurisdiction of municipality.