Bhooth Bangla is not a sequel to Bhool Bhulaiyaa. It belongs to a completely different story and is not connected to the Bhool Bhulaiyaa franchise. Bhooth Bangla is a separate horror-comedy project with new characters, themes, and narrative, directed independently without any continuation of the earlier series.
This is where it gets interesting because officially Bhoot Bangla is NOT a sequel to Bhool Bhulaiyaa. It marks Priyadarshan's second Hindi-language horror comedy film following Bhool Bhulaiyaa (2007), both of which star Akshay Kumar, Paresh Rawal, Rajpal Yadav, Asrani, and Manoj Joshi.
However director Priyadarshan has denied that Bhooth Bangla is a sequel, stating that "Bhool Bhulaiyaa is a psychological thriller, but Bhooth Bangla is a fantasy," and emphasized that while the entertainment bits are similar, they are very different films on the whole.
So what we're looking at is basically a spiritual successor with the same director and core cast but completely different storytelling and genre approach. The confusion makes sense because they share so much DNA but technically Priyadarshan is being clear that this is its own thing entirely.
Technically no it's not a sequel but honestly the relationship between these films is complicated. Actor Jisshu Sengupta clarified the distinction between the genres, stating that Bhoot Bangla is a horror comedy while Bhool Bhulaiyaa was a psychological thriller, which is an important distinction.
What's interesting though is that portions of the film were shot at several locations including Chomu Palace, a location previously used by Priyadarshan for his 2007 film Bhool Bhulaiyaa. So they're using the same filming locations but completely different storylines and mythological backdrops.
I think what happened is that the makers wanted to leverage the nostalgia and chemistry of their previous collaboration while creating something fresh and new. It's not a sequel in the traditional sense, but it's definitely a spiritual continuation of the director's horror-comedy work with this particular ensemble cast.