The police said three people, including the abductor and the buyer, had been arrested.
The police found the boy Sunday, deputy commissioner of police (DCP), Rohini, Rajneesh Gupta, said.
After a case of kidnapping was registered at the Bawana Police Station on Friday, the police formed teams and inspected CCTV footage from the area around the child's house.
They spotted a woman picking up the boy. Further investigations revealed the woman, Sonia, was a resident of Indraj colony, Mr Gupta said.
Though she was not found in her house and kept changing her location, the police managed to trace the woman with the help of electronic surveillance.
During interrogation, Sonia confessed to picking up the boy and selling him to a woman identified as Rajni, 37, a resident of Ishwar colony in Bawana. Rajni apparently paid her Rs 45,000 for the child, the police said.
The police said it had recovered Rs 42,000 from Sonia. Rajni and her nephew, Saurabh, 27, were arrested and the boy was recovered, it said.
Rajni told the police she wanted the boy for her sister, Santosh, whose son had died in a fire in 2015. Santosh was not aware of the plot, the police said.