How is this wrong?

"Neha sleeps on the floor" is in the simple present tense and implies that she habitually sleeps on the floor. It would be translated into Hindi as 'नेहा ज़मीन पर सोती है'.

The given sentence 'नेहा ज़मीन पर सो रही है' is in the present continuous tense and is telling you that the action is currently in progress. So, it would be translated as 'Neha is sleeping on the floor'. When you see the helper verb 'रहना' in a sentence, it implies that the sentence is in the present continuous tense.