Karala revealed the murder conspiracy during interrogation after he was brought from Jhajjar jail on a production warrant, Superintendent of Police Rahul Sharma said.
Karala was produced before a court, which sent him to four-day police remand, Sharma said.
The accused revealed the names of his four accomplices who killed Dahiya but they cannot be disclosed at the moment, he said, adding that police teams were raiding various places to nab the four men.
"Dinesh (Karala) is a notorious gangster. Twelve criminal cases have been registered against him at various police stations in Sonepat, Jind, Jhajjar and Delhi," he said.
Her sister Lata earlier said, "Dinesh, my husband" was behind the killing. "He got her killed because she was a witness in the murder case of her mother," Lata had claimed.
Dahiya's brother-in-law has been charged with the murder of her mother. Her mother was killed in 2014 in Delhi and the singer was the prime witness in the case, the police had said.
Dahiya was living in Narela in Delhi.
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