Income from mother in law is taxable

NO
Gift from Mother in law is not taxable since gift received from relative is not taxable as per Income tax act and Mother in law satisfies the definition of relative.
For Section reference, you can refer Sec 56(2)(x) of Income tax act (also read Provisio to this section since point related to Not taxable is mentioned in Provisio)

Gift from mother in law falls under exceptions of Sec.56(2)(x) Taxation of gifts , so it will not be taxable as it is from relative.