Rahat Fateh Ali Khan and the other two men were released by revenue officials late Monday but their passports have been withheld pending further investigations, the Press Trust of India (PTI) news agency said.
Khan, a nephew of the late Pakistani singing great Nusrat Fateh Ali Khan, had performed a series of concerts in India.
The 37-year-old artist will be questioned again later this week over the incident in which his group were boarding a plane to Lahore via Dubai on Sunday when airport authorities found the cash in their bags, PTI reported.
Pakistani High Commission officials were reported to have tried to meet the men while they were being held.
According to Indian customs rules, visitors are allowed to carry only $5,000 in and out of the country.(AFP)
