Change into direct speech: She told her mother that she was going to the market.

She said to her mother, "I am going to the market."

She said to her mother, "If she could go to the market"

She said to her mother, "I was going to the market"

None of these

She said to her mother, "I am going to the market."

In direct speech, "she was" (in indirect) changes back to "I am", because the speaker is quoting herself directly.

The reporting verb "told" changes to "said to" in direct speech when a dialogue is quoted.