Deepaji, Is it legally allowed to marry my grandfather's sister's daughter's daughter? Will that affect our child's health?

Hello madam, I am 41 year old , married , my wife also same age have a daughter 4 year old. I lost my parent in the earlier age that i did not remember (when i was around 5 to 6 year old ) .After that i am grown up by my distance relative(which is now my in-law family).In my in law family only my mother in law and 2 daughter (One my wife and other my sister in law (un married , 35 year now ). So now i am staying in in law home only as i do not have any body apart from them. They are very loyal to me and take care very much as i told i am staying from childhood. I married around 10 year back and my wife first delivery is so complex one. Our doctor advice not to be proceed with any more pregnancy , it may harm her life. now mom-in-law, wife both telling me that get married to sister-in-law (just informally) I mean they want a baby by me and sister-in-law . because she is 35 year old now for make a family. sister-in-law she also agreed .frankly speaking i have physical relationship with my sister in law and the my wife knew that and she does not have any problem(she is not active in physical relation as her body is not supporting ). So need your advice in this case.

I am in a delimma on my daughters approach.She is a doctor and with higher specialisation . All of a sudden she comes forward and says wants to marry a person who is her batchmate but is an inter caste and younger to her by a year . Caste is of lowest strata . I am a person who always respected everybody but the approach of this kind without considering the pros and cons and acting very violently to make it happen is very disturbing and I am in a dilemma . Please suggest