Gift from sister of Father in law

Yes it will be taxable..

Exemption under section 2 (41) of Income tax is NOT AVAILABLE in this case.

As far Gifts from SPOUSE OF INDIVIDUAL the following  exemption under section 2 (41) of Income tax is AVAILABLE :-

Spouse of the individual 

Brother or sister of the spouse of the individual

Any lineal ascendant or descendant of spouse of the individual

I am a layman, this is what I gathered from experts of this forum