How to Setup WordPress Permalinks on Windows IIS — Place this file into the base directory of your WordPress installation to allow permalinks (or "pretty URLs") on Windows IIS.

web.config

<?xml version="1.0" encoding="UTF-8"?>
<configuration>
  <system.webServer>
    <rewrite>
      <rules>
        <rule name="wordpress" stopProcessing="true">
          <match url=".*" />
          <conditions logicalGrouping="MatchAll">
            <add input="{REQUEST_URI}" matchType="Pattern" pattern="^/wp-content/" negate="true" />
            <add input="{REQUEST_FILENAME}" matchType="IsFile" negate="true" />
            <add input="{REQUEST_FILENAME}" matchType="IsDirectory" negate="true" />
          </conditions>
          <action type="Rewrite" url="index.php" />
        </rule>
      </rules>
    </rewrite>
  </sy
</configuration>

Added line 9 for image's bug correction:

<add input="{REQUEST_URI}" matchType="Pattern" pattern="^/wp-content/" negate="true" />