Khan, however, cannot leave India, as his passport has been impounded.
The DRI has impounded Khan's passport along with the passports of his two associates Mahroof and Chitresh, who also have been set free.
According to reports, Khan and his associates have been asked to appear for questioning before the DRI on February 17.
The DRI is set to estimate the fine to be paid by the Pakistani singer.
Earlier today, revenue intelligence officials questioned the singer extensively to find out where the money came from and why it was not declared.
Khan was detained on Sunday for allegedly attempting to leave the country with over 124,000 dollars.
Indian laws allow up to 5,000 dollars in cash, or 10,000 dollars in traveller's cheques to be taken abroad.
Khan, along with his troupe of about 20 people, was scheduled to fly to Lahore on a Emirates flight after a series of performances in India. (ANI)