Explanation:

- Initially, the person's income is Rs 12,000, and the expenditure is Rs 8,000.

- Savings initially = Income - Expenditure = Rs 12,000 - Rs 8,000 = Rs 4,000.

- The next year, income increases by 10%, so the new income is Rs 12,000 + 10% of Rs 12,000 = Rs 13,200.

- The expenditure increases by 8%, so the new expenditure is Rs 8,000 + 8% of Rs 8,000 = Rs 8,640.

- New savings = New income - New expenditure = Rs 13,200 - Rs 8,640 = Rs 4,560.

- The increase in savings = New savings - Initial savings = Rs 4,560 - Rs 4,000 = Rs 560.

- Percentage increase in savings = (Increase in savings/Initial savings) x 100 = (Rs 560/Rs 4,000) x 100 = 14%.

Therefore, the correct option is:

Option: 2 - 14%