pvscd, hi, on the facts as stated neither you nor your wife qualify to apply for naturalisation at the moment. This is because you both fail the "must not be outside the UK for more than 90 days in the one year up to the date IND receive the application form" test.
Basically, on your facts, you will need to wait until at least 9 months after you got back from India, and even that assumes no more time outside the UK.
But planning ahead, at least for you (but not for your wife), let's assume that you might get your application form to IND on say 03.10.05. I presume when you say "got ILR in last Jan'05" that you actually mean Jan 04, because you go on to say that you then spent 10 months in India. So if ILR granted in Jan 04 it must be clear by 03.10.05 that you will have had ILR for over a year. So that test will be passed.
Then, still assuming that IND receive your application form on say 03.10.05 :-
- were you physically in the UK exactly five years earlier ... on 03.10.00? If not then you must not submit the form ... yet.
- in the five year period from 03.10.00 to 03.10.05, were you outside the UK for more than 450 days? If so, don't submit the form yet.
- in the one year period from 03.10.04 to 03.10.05, were you outside the UK for more than 90 days? If so, don't submit the form yet.
Obviously if IND get the form on any other date, the date ranges/tests will of course be a bit different.
So it could be the case that in say next October you might be able to apply, and no doubt by then your child will also be in the UK and you can include that child on the form. Your wife will need to wait until at least nine months after she gets back into the UK before submitting her naturalisation application form. Whether you also delay sending in yours, so that they can go in together would be a matter for you and your wife to decide.
Hope this helps.