According to police, the three-year-old boy was playing outside his house in the city's Madhu Vihar area where the accused, identified as Vinod, approached him.
As the child failed to return home, his parents searched for him and then informed police.
Police personnel traced the boy at Vinod's house.
Following medical examination, it was found that he was sexually assaulted.
Police said Vinod had been arrested and booked under the Protection of Children from Sexual Act, kidnapping and sexual abuse.