Children and youths burst crackers and lit sparklers while families, dressed up in their best outfits, visited their neighbours, exchanged 'Happy Diwali' greetings and sweets. People also took the route of SMS and social networking websites to wish each other.
Diwali is celebrated to mark the return of Lord Rama to Ayodhya from his exile after vanquishing demon-king Ravana.
In the national capital, people decorated their homes and shops with colourful 'rangolis' and flowers and lit diyas.
Prime Minister Narendra Modi greeted the people on the occasion saying, "Lets share happiness and joy during this festive season. Share Diwali e-greetings with your family and friends."
Modi today visited Jammu and Kashmir and spent some time with soldiers posted on the heights of Siachen Glacier to send the message that all Indians stand shoulder-to-shoulder with them.
He also greeted President Pranab Mukherjee from the icy heights on the occasion.
Modi then travelled to Srinagar to meet the flood victims in Jammu and Kashmir.
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