The presence or absence of hydroxyl group on which carbon atom of sugar differentiate RNA and DNA:

The correct option is 2^nd.

To understand why this is correct, we can look at the chemical structure of the pentose (five-carbon) sugars present in nucleic acids:
1. RNA (Ribonucleic Acid) contains the sugar ribose. Ribose has a hydroxyl group (-OH) attached to its 2^nd carbon (C2') atom.
2. DNA (Deoxyribonucleic Acid) contains the sugar deoxyribose. The prefix "deoxy-" indicates that this sugar has "lost an oxygen" compared to ribose. Specifically, the hydroxyl group at the 2^nd carbon (C2') position is replaced by a hydrogen atom (-H).

Thus, the presence of a hydroxyl group (-OH) at the 2^nd carbon in ribose, and its absence (replaced by a hydrogen atom, -H) at the 2^nd carbon in deoxyribose, is the key structural difference that distinguishes RNA from DNA.