Hilal ibn Yasar said: We were with Salim ibn Ubayd when a man from among the people sneezed and said: Peace be upon you. Salim said: And upon you and your mother. Later he said: Perhaps you found something (annoying) in what I said to you. He said: I wished you would not mention my mother with good or evil. He said: I have just said to you what the Messenger of Allah ﷺ said. We were in the presence of the Messenger of Allah ﷺ when a man from among the people sneezed, saying: Peace be upon you! The Messenger of Allah ﷺ said: And upon you and your mother. He then said: When one of you sneezes, he should praise Allah. He further mentioned some attributes (of Allah), saying: The one who is with him should say to him: Allah have mercy on you, and he should reply to them: Allah forgive us and you.  

سَالِمٌ وَعَلَيْكَ وَعَلَى أُمِّكَ ثُمَّ قَالَ بَعْدُ لَعَلَّكَ وَجَدْتَ مِمَّا قُلْتُ لَكَ قَالَ لَوَدِدْتُ أَنَّكَ لَمْ تَذْكُرْ أُمِّي بِخَيْرٍ وَلاَ بِشَرٍّ قَالَ إِنَّمَا قُلْتُ لَكَ كَمَا قَالَ رَسُولُ اللَّهِ ﷺ إِنَّا بَيْنَا نَحْنُ عِنْدَ رَسُولِ اللَّهِ ﷺ إِذْ عَطَسَ رَجُلٌ مِنَ الْقَوْمِ فَقَالَ السَّلاَمُ عَلَيْكُمْ فَقَالَ رَسُولُ اللَّهِ ﷺ وَعَلَيْكَ وَعَلَى أُمِّكَ ثُمَّ قَالَ إِذَا عَطَسَ أَحَدُكُمْ فَلْيَحْمَدِ اللَّهَ قَالَ فَذَكَرَ بَعْضَ الْمَحَامِدِ وَلْيَقُلْ لَهُ مَنْ عِنْدَهُ يَرْحَمُكَ اللَّهُ وَلْيَرُدَّ يَعْنِي عَلَيْهِمْ يَغْفِرُ اللَّهُ لَنَا وَلَكُمْ  

The tradition mentioned above (No. 5013) has also been mentioned by Salim ibn Ubayd al-Ashja'i to the same effect from the Prophet ﷺ through a different chain of narrators.  

عَنِ النَّبِيِّ ﷺ  

When one of you sneezes, he should say: "Praise be to Allah in every circumstance," and his brother or his companion should say: "May Allah have mercy on you!" And he should then reply: "May Allah guide you and set right your affairs."  

عَنِ النَّبِيِّ ﷺ قَالَ إِذَا عَطَسَ أَحَدُكُمْ فَلْيَقُلِ الْحَمْدُ لِلَّهِ عَلَى كُلِّ حَالٍ وَلْيَقُلْ أَخُوهُ أَوْ صَاحِبُهُ يَرْحَمُكَ اللَّهُ وَيَقُولُ هُوَ يَهْدِيكُمُ اللَّهُ وَيُصْلِحُ بَالَكُمْ