The woman was practicing exorcism to cure her father who had been ailing for some time.
The woman, Moni, was helped by her husband Mooli and brother Raju in the act, which happened on Tuesday.
The sister-in-law Renu who suffered the cuts, was given 300 stitches on her face and other parts of the body by the doctors.
Renu has been admitted to the Intensive Care Unit (ICU) where her condition is said to be serious.
Moni, 30, has been sent to jail while Mooli and Raju are absconding.
Baradari police station officer inspector Naresh Tyagi said that a complaint had been filed by Renu's brother under section 307 (attempt to murder) of IPC.
"We will record Renu's statements in a day or two once she is stable and in a condition to talk to us. We have sent Moni to jail," the inspector said.
Renu, a resident of Ganghora village in Bareilly, was married to Sanjeev around eight years ago.
Her father-in-law, Jagdish, fell ill a few months ago.
"Accused Moni, who practices exorcism, decided to cure her father by initiating the act. Going by superstitious beliefs, they inflicted as many as 101 cuts on Renu's face and body. It cannot be ruled out that they wanted to sacrifice her to complete the act," police inspector said.
On Tuesday night, the accused had locked Renu's husband and mother-in-law in another room when they tried to stop them from making her a scapegoat.
When the accused trio started inflicting cuts on Renu, she struggled to get out of their clutches and somehow managed to escape from the house.
She had run a short distance when she collapsed and became unconscious. A police constable on patrol reportedly spotted her and she was taken to a district hospital. Once regaining her consciousness, she narrated her ordeal to the police who then informed her parents.
( With inputs from IANS )