Judge P P Jadhav also fined the accused Manju Dilip Shukla Rs 10,000. If the fine is not paid, she will have to undergo rigorous imprisonment for another six months.
The court however acquitted her husband Dilip Shukla giving him the benefit of doubt.
Prosecutor Vinit A Kulkarni said that Neelam, the victim, was the wife of Dilip's brother Sandeep, who was working with a bank in Mumbai.
She and Sandeep were living with Dilip and Manju at the latter's house in Bhaskar colony here.
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On October 8, 2014, Manju took away the ration card which Neelam had packed in her bag, which led to a quarrel.
Next day, late at night when Sandeep was out, the two women were in the kitchen and Dilip in another room, Manju doused Neelam with kerosene and set her on fire.
Neelam died at a hospital on October 12, 2014, after giving a statement to the police.
The prosecution relied, among other things, on her dying declaration.
During the arguments, Manju's lawyer sought leniency for her as she had two children.