flying to Iceland from India & layover is at Helsinki & Stockholm, do I need transit visa?
To legally enter Iceland, you'll need a Schengen visa (or be of a nationality that can travel to the Schengen area without a visa). Finland (Helsinki) and Sweden (Stockholm) are also part of the Schengen area, so the same visa applies to them.
If you travel via Helsinki and Stockholm, you'll enter the the Schengen area in Helsinki. This should be perfectly all right assuming your Schengen visa is in order.
As has been noted in other questions here, it is not necessary for your first stop in the Schengen area to be the same country that issued your visa.