We present the results of ab initio calculations of lattice dynamics and the second order elastic stiffness constants of nickel-based magnetic shape memory alloy Ni2MnIn in stoichiometric composition. The plane wave basis sets and pseudopotential method within spin-polarized generalized gradient approximation (sigma-GGA) scheme of the density functional theory (DFT) is applied. Elastic constants are calculated by tetragonal and monoclinic isochoric strains on cubic L2(1) structure. The calculated elastic constants agree very well with the recent ultrasonic experimental data. Phonon dispersion spectra are investigated within linear response technique of the density functional perturbation theory (DFPT). A vibrational anomaly is observed in phonon spectra at the transverse acoustic mode (TA(2)) in [zeta zeta 0] direction at wavevector zeta = 0.3 as an indication of the structural instability of the system to shear deformation. This anomaly is also verified by the low shear modulus and large elastic anisotropy ratio. Phonon dispersion curves are in excellent agreement with the results of recent neutron diffraction experiments.