Priya Mehra, 34, died of two bullet injuries in a city hospital in the early hours of Wednesday.
Her husband Pankaj Mehra had said that she was shot by unknown assailants while they were travelling in a car with their two-year-old son in Shalimar Bagh area of west Delhi.
He also told police that he was unable to pay back the money borrowed from a man and claimed the lender was behind the murder.
Deputy Commissioner of Police Milind Mahadeo Dumbere on Thursday told IANS that Pankaj Mehra had borrowed the money, adding he killed his wife as part of a conspiracy so that the finger of suspicion points to the lender.
“He wanted to make it look like the lender killed his wife. Pankaj Mehra also has a second wife.”
Dumbere said that Pankaj Mehra has during the interrogation accepted that he murdered his wife.
“On sustained interrogation, the husband Pankaj Mehra has finally confessed of killing his wife Priya Mehra. He is being taken along with the team to recover the weapon,” he added.
A senior police officer told IANS that their son might have been present at the time of the murder, but might have been asleep in the car.