The incorrect statement about aniline is

•  Aniline is immiscible with water. It is soluble in organic solvents such as ether, alcohol, benzene, etc. Thus, it is incorrect to say that aniline is highly soluble in water. Rest all of the given statements are correct. Aniline is steam volatile, it is less basic than ethyl amine, and on reaction with $\mathrm{Na}$, it gives ${\mathrm{H}}_2$.

Hence, the correct answer is option D) it is highly soluble in water.