On the instructions of the child's father Amit, Karthik, a resident of Sikandrabad town, was kidnapped by Shivkumar (25) last Wednesday while playing, SSP Gulab Singh said.
While an FIR was lodged by Amit in the case, a ransom of Rs 10 lakhs was demanded by the kidnapper by phone.
Shivkumar was arrested after tracing the call, he said, adding that he claimed that Amit had staged the kidnapping to recover the amount from Karthik's grandfather Jagdish Gurjar.
The boy has been rescued, he said.
Amit is absconding and a search is on for him, he added.