I want some basic things in toolkit (like oiling of chain, tightening of brakes etc). Where can I find them and how much does it usually cost? I want to buy one, so can you name the basic tools with their functions in layman's language?
You can easily find a "bicycle multitool"/"multi bicycle tool"/"bike multifunction tool" that covers all the basic essentials in one tool. There's tons of brands and models and what's most readily available may vary regionally, but common brands I've seen are: Park, Crank Brothers, Topeak, Serfas.
Where? I would go to my local bicycle shop to get them, or there's plenty of places you can order them online. I have no idea what Walmart stocks. REI, Amazon.com, jensonusa.com, etc. The only place recommendation I'd go with is: your local bike shop, that's owned by people into bicycles and primarily sells bicycles; they're bound to have some tools for sale.
- Screwdrivers - both straight/standard/slot and philips. You probably already have some.
- Hex Keys (Metric) - (drivers, bits for a driver, whatever...). Also called "Allen keys", "hex keys", "hex driver", etc. 3-8mm range, typically, but you might need 1.5mm, 2mm, and/or 2.5mm. Most of the bolts on a bicycle are hex, and they're always metric. It's likely that adjusting your brakes, for instance, requires a very small hex bit, swapping your water bottle cage a more medium sized hex bit, and adjusting your seat a larger hex bit. L-shaped ones where the long end has a "ball" version of the hex and the short end is straight are nice; the ball lets you work at awkward angles and when the short side is used you get more leverage. There's also some nice Y-shaped ones with 3 different sizes that I see used a lot. The exact sizes will depend on your bike and components.
- Maybe Torx - it's unlikely but possible that there's Torx somewhere on your bike. Apparently they're common on disc brakes.
- Tire Levers - these are usually plastic (nylon), and are used to remove your tire from the wheel so that you can repair flats. Commonly sold in sets of 3. Experienced people can get a tire off with just one, but it's easiest if you have three. 2-10USD for a set.
- Pump - A floor pump and a portable pump on the bike is great. There's two kinds of valves, make sure your pump works with your valves. Many pumps can convert between them. The floor pump is for when you're working on things at home, the portable pump you take on the bike (along with tire levers and patch kit or a spare tube), because a floor pump is much easier to use than any portable pump.
- Rags - an old rag or two, for grasping very greasy parts, wiping off the chain after lubricating it, etc. Cotton is good, and preferably fairly smooth (not an old terrycloth towel; the loops snag).
Except for the pump and rags, a typical bicycle multitool will have all those and cost between 20USD and 40USD. A "standalone" version of each tool will almost always be better than what's included in a multitool, but more expensive to get a whole set. However, you can get a decent set of hex keys for under 10USD and tire levers for 5USD and still be a bit cheaper than a multitool.
- Chain Lube - only need a very small bottle, and usually the bottle has a tip you can use to apply the lube without using another tool. Make sure it's a lubricant intended for use on bicycle chains. In particular, WD-40 is no good for this. Obviously not included in a multitool, generally 3-10USD for a small amount.
- Flat repair kit - This is a little kit costing under 5USD (they're a common giveaway item, even) for fixing holes in a tube (the thing inside the tire that holds the air). Generally a small amount of sandpaper or sort of metal file is included in the kit. There's self-adhesive patches, but I find the ones that have a separate tube of glue work better. Usually instructions are included.
- Spare tubes - The patches eventually give out, so you'll want a spare tube or two.
Really, I think that covers the basics. You might also consider:
Less important / Less "basic"
- Spoke wrench - to adjust the spokes if they're loose, etc. Also needed if you have to replace a spoke. If you think you'll have to replace spokes, you may also need a chain whip and a tool for removing the rear gears, but the specifics will depend on your bike and that's getting a bit beyond "basic". Truing a wheel (making it straight and perfect) without a truing stand is tricky and a truing stand is definitely beyond a "basic" toolkit.
- Tire boot - bit of rubber to patch the tire if you have a big gash in the tire. However, punctures (which generally don't require a boot) are more common than gashes, and you can make a makeshift boot out of all sorts of things, such as a $1 bill.
- Chain tool - for makeshift chain repairs. Usually chain problems mean you should replace the chain, but if you're out on the road and your chain breaks, you can remove a link and reconnect your chain (shorter) and make it home (avoiding the bigger gears until the chain is replaced)
- Hex sockets - (metric, under 10mm). Less common on bikes, and another item people already commonly have, but you may need both "genders" of hexagonal wrench. On my own bike, I've used this on the fenders and not much else. Open or box is fine, and thin is probably fine, too.
The bike toolkits you'll find at Walmart and the like are near worthless -- the tools are poor quality and frequently not really usable. (Eg, the "dumbell" wrench that's often included is too bulky to fit in many places where you might need it.) Either get a multitool made by one of the mfgrs mentioned in Freiheit's post or collect the individual tools you need, bought at a good hardware store, with the few specialty pieces bought at a bike shop. Keep in mind that you don't need tools that don't fit your bike (but you may need, eg, two copies of one particular size of wrench in order to tighten some fastener on your bike, so even with the multitool you may need a few other pieces). And don't scrimp on tools -- a poor-quality wrench can wreck a bolt to where it can't be removed from the bike.
In terms of oil, don't use ordinary motor oil or "3 in 1" -- buy purpose-made bicycle chain oil at a bike shop. The bike shop people can describe to you the differences between the various types. For cleaning your chain consider getting a chain scrubber (along with the appropriate chain cleaner fluid).
If you want to carry tools on your bike, the best way is with a tool bag that straps under your seat. You can actually improvise this with just a maybe 16" square of canvas and some buckle/Velcro straps (just roll up the tools into a bundle), though a purpose-made bag is nice. For the tools that stay home, a simple plastic box or a "tool roll" is often a better choice than a compartmented toolbox.
For removing and installing tires I'm partial to the Quick Stick rather than conventional tire levers -- much less chance of damaging the tube, and generally a lot faster. However, it won't work on some particularly tight tires.
In terms of how to do things, Park Tool Company has an excellent web site that covers virtually everything you might want to do.