The plot is linked with the previous film Bhoothnath. When Bhoothnath, although his real name in the two films is Kailash Nath, (Amitabh Bachchan) enters the Bhoothworld, (a ghosts' world) he is mocked and questioned about his abilities as a ghost as he was unsuccessful to scare any child. To redeem himself, he returns to India where he tries his best to scare children but is unsuccessful with his attempts as children have become strong physically and mentally and also skilled in giving bad words. However, a boy named Akhrot (Parth Bhalerao) can see him in his true form. Akhrot is not scared of Bhoothnath, but helps him to scare a few children. In return, he asks Bhoothnath to act scared of him and to run away from a haunted house while he chants mantras in front of his friends, so that his friends can accept him in their cricket team. Bhoothnath decides to help him further by helping him earn money by giving ghosts living in under-construction high rises peace by fulfilling the wishes they were still staying back on Earth as ghosts for. In the process, they come to know why the ghosts died, and help their families get insurance money by scaring corrupt insurance officers. In the process, he gets to know about Bhau (Boman Irani), a former criminal who is now a corrupt politician. After having seen the amount of corruption in India and encouraged by Akhrot, Bhoothnath decides to contest the upcoming elections. Soon, the rivalry between Bhoothnath and Bhau heats up, to the extent that Bhoothnath sacrifices his powers to win. One day before the elections, a rally is to be held by Bhoothnath to encourage a high turnout on election day. Bhau's men threaten to kill Akhrot unless he prevents the rally from happening, but Akhrot refuses and is ready to face the consequences. On the day of the rally, Bhau's men injure Akhrot grievously for his non-compliance, which makes Bhoothnath leave his rally to be with Akhrot in the hospital. He goes to the Bhoothworld and begs for Akhrot's life. They tell him that if Bhoothnath wins the election, they will spare Akhrot's life. Meanwhile, Bhau uses Bhoothnath's absence at the rally to his advantage and tries to influence the audience to vote for him. However, on election day, the majority of the public vote for Bhoothnath. The next day, Bhootnath sees Akhrot's heartbeat rising and realises that he won the election. The film ends with Akhrot regaining consciousness and everybody celebrating the success of Bhoothnath.

• Amitabh Bachchan as Kailash Nath (Bhoothnath)
• Boman Irani as Bhau Sahib
• Parth Bhalerao as Akhrot
• Usha Jadhav as Bindia Pathak (Akhrot's Mother)
• Sanjay Mishra as Mishti Baihud
• Kamlesh Sawant as Police Inspector (as Kamlesh Tukaram Sawant)
• Brijendra Kala as Lallan
• Usha Nadkarni as Lolita Singh
• Kurush Deboo as Psychiatrist
• Gajraj Rao as Bade Sahaab
• Shahrukh Khan as Aditya Sharma (Banku's Father)(Special Appearance)
• Ranbir Kapoor as Himself (Special Cameo Appearance)
• Anurag Kashyap as Himself (Cameo Appearance)

The film score was composed by Hitesh Sonik while the songs featured in the film were composed by Ram Sampath, Meet Bros Anjjan and Palash Muchhal. Yo Yo Honey Singh also composed one promotional song for the film which remarked as its first collaboration with Amitabh Bachchan.

Taran Adarsh from Bollywood Hungama gave the movie 3.5 stars and said that "Bhoothnath Returns is made with noble intentions and the message it conveys resonates in the second hour". Suprateek Chatterejee from First Post called it "a must watch for kids" and found that it's "shamelessly manipulative moments are tempered with deliberate humour". A Filmfare reviewer found that the "strength of this film is in its writing" and praised Amitabh Bachchan for his performance whilst giving the movie 3 stars. Rohit Khilnani of India Today, gave the movie 3.5/5 stars and said, "There is no doubt that Bhoothnath will entertain cine-goers. It's entertainment, Bachchan style!"^[12]

Bhoothnath returns collected ?300 million (US$4.5 million) domestic and ?20 million (US$300,000) overseas(as of 20 April 2014). Satellite rights of the film is sold to Sony for ?210 million (US$3.1 million); made it a good profitable venture for producers.^[1]

The film that released in over 1,300 theatres saw a "grand" opening of 93%%^[13] collecting ?32.5 million (US$480,000)—?35 million (US$520,000) on its first day with stiff competition from the film Disco Singh.^[14] With a growth of 60% over its first day collection, it collected ?55 million (US$820,000) on its second day.^[15] After the completion of the films' first weekend, it managed a "fair" collection of ?165 million (US$2.5 million).^[16] It collected around ?40 million (US$600,000)^[17] and ?17.5 million (US$260,000)—?20 million (US$300,000)^[18] on its first Monday and Tuesday respectively, totalling ?225 million (US$3.4 million) over the first five days of its release.^[18] After a good growth on Monday, it saw a slide in its collections over the next few days to end up collecting ?260 million (US$3.9 million) in its first week.^[19]