C is the answer to this question. It will be hard to understand this question in the beginning. You may want to analyze things properly. First of all, you will notice the phrase mother’s mother. This means that this is your grandmother. The only son in law of the mother of Poonam’s mother is Poonam’s father.
The son of the father of Poonam is obvious Poonam’s brother which means that the relationship of Poonam with the birthday celebrant is a sister. There are other questions like this that will challenge your mind especially when you need to think several times before you finally get the right answer.