C.
The given numbers are in octal representation. Digits range from $0$ to $7$.
$Y=7526-4364$
$\;\;\;7526$
$-4364$
_______
$\;3142$
steps : 1. $(6-4) =2$
2. $(2-6)$ , borrow a $8$. Now $(8+2-6)=4$
3. $(5-1-3) = 1 $ (Subtracted by 1 because ONE $8$ was borrowed)
4.$ (7-4) = 3$