The correct answer is Second stage.

Episiotomy is given in the second stage of labour (from full cervical dilatation to delivery of the baby), when the perineum is bulging and thinned by the crowning head, just before the head is born.

In the first stage the cervix is still dilating and the head has not reached the perineum; the third stage is placental delivery and the fourth is the first hour of observation after delivery, when the episiotomy is repaired, not made.

Short trick: Cut at crowning = second stage.