The four injured are being treated at Madikeri and Mysuru Hospitals, they said, adding the 50-year-old accused Yeravara Boja is absconding.
According to police sources, Boja, an estate labourer, had frequent fights with his wife Babi, following which she had left home a week ago and stayed at her brother Manju's house in the same village.
An inebriated Boja went to his brother-in-law's house at 2 am on Saturday and locked the house from outside. He is said to have climbed the roof of the house, removed the tiles and poured petrol into the house and set it ablaze, they said.
Manju and another family member Thola who were not in the house, rushed to the spot and brought four people outside.
Babi (40), Bhoja's aunt Seethe (45), a relative's daughter Prarthana (6) were charred to death.
Manju's sons - Prakash (6), Vishwas (7) and son of Thola - Vishwas (6)-- were rescued from the house, but they succumbed to injuries at hospital, police said.
Four others related to the family are being treated at Madikeri and Mysuru hospitals, officials said.
Mysuru IGP Praveen Madhukar Pawar and Kodagu SP Kshama Mishra visited the spot.
Police have registered a case and are on the lookout for Bhoja.