Explanation:

- Damdama Lake is a natural reservoir located in the state of Haryana.

- It is one of the largest lakes in Haryana and a popular tourist destination.

- The lake is situated near the town of Sohna in the Gurugram district.

- Option 1: Punjab - This state shares borders with Haryana but does not have the Damdama Lake.

- Option 2: Rajasthan - Known for its deserts, it is a neighboring state but not the location of Damdama Lake.

- Option 3: Haryana - Correct. Damdama Lake is located here.

- Option 4: Uttar Pradesh - This is another neighboring state but not relevant for Damdama Lake.

- Option 5: Bihar - Farther east and not related to this lake.