Oxygen released during photosynthesis comes from 

Photosynthesis is the process by which plants make their own food in the presence of sunlight and water with Oxygen as its byproduct. 
Oxygen is liberated through water molecules by photolysis. This is proved by an experiment conducted by Matrix Kamen and Samuel Ruben. Before their experiment, it was assumed that oxygen comes from carbon dioxide.
Water and carbon dioxide are both absorbed by the plants for the photosynthesis process, but the breakdown of water molecules result in the formation of the oxygen, that is released from the stomatal pores in the atmosphere.

Hence, the correct answer is C.