Hi Varghese,
Please view this link it can help to know more to create thumbnail whatever it is either jpeg or gif
Article - How to create thumbnails with PHP and gd.
For simple we can
header("Content-type: image/jpeg");
$im = @imagecreate(100, 50)
or die("Cannot Initialize new GD image stream");
$background_color = imagecolorallocate($im, 255, 255, 255);
$text_color = imagecolorallocate($im, 233, 14, 91);
imagestring($im, 1, 5, 5, "A Simple Text String", $text_color);
imagejpeg($im);
imagedestroy($im);
i think it will help you