We have index set on a list column of type option. We have put row limit in the query as 5000 and also using queryposition. Still when we use this column in where clause of caml query getting error for throttling. Please suggest.
You can read the following link and associated white paper. Sorting also has affect on throttling so you need to examine your order by conditions.
Indexing does help in averting list view threshold error only when the number of list items returned by a query using indexed column is less than threshold limit. Moreover, rowlimit doesn't have any effect on list view threshold.
Suppose, you create a view and apply a filter on non indexed column and the view returns 4000 items and total number of items in a list is 7000. The normal users will get throttling exception. This is because the view will try to scan all items (7000) in the list and then apply the filter. However, if the field is indexed, it will only scan 4000 items and users won't see throttling exception.
See I have list contains 7000 item, and I need to show latest 10 items on the home page for more information