Step 1: Recall the meaning of sublimation.
Sublimation is the process in which a substance changes directly from the solid state to gaseous state without passing through the liquid state.
Step 2: Analyze the given substances.
Table salt: Does not sublime
Sugar: Decomposes on heating, does not sublime
Iodine: Sublimes on heating — correct Potassium iodide: Does not sublime
Step 3: Final conclusion.
The substance that shows sublimation is iodine.
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\boxed{\text{(C)}}
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