Is "He asked where did I live" correct?

Why

Arjun has correctly handled the tense shift (lived, past) and the pronoun shift (I), applying the rules learned so far — genuinely good progress. What's left is a rule specific to QUESTIONS: a direct question flips its word order ("do you live", helper word before subject) and needs a helper word like "do/does/did" to work as a question. Once a question is folded into a REPORTED sentence, though, it stops being an actual question being asked right now — it becomes a description of a question, and descriptions use normal statement word order: subject before verb, with no "do/does/did" helper needed at all. "He asked where did I live" keeps the question's flipped structure inside what is now a statement, creating a structure that belongs to neither pattern cleanly. Test: compare it to reporting a normal statement — "I live in Delhi" reports as "He said that I lived in Delhi", subject before verb, no helper word — reported questions follow that exact same statement-shaped pattern, just introduced by "asked" instead of "said". His sister is right: reported questions use normal statement word order, no "did" needed — "He asked where I lived", not "He asked where did I live".