MUMBAI - Indian police have arrested the alleged mastermind of a multi-million dollar racket in which callers posing as US officials tricked Americans into paying bogus tax bills, officials said.

Sagar Thakkar, 24, was making more than 10 million rupees ($155,000) a day at the height of the scam, which operated for nearly a year before it was exposed last October, police said.

Thakkar is accused of calling victims in the United States and berating them for not paying phoney tax bills, threatening them with jail if they did not cough up immediately.

He fled to Dubai after the scam was exposed but was arrested early Saturday when he flew back to India where he planned to revive his operation, police said.

"He has confessed to his crimes," Parambir Singh, commissioner of police in the Mumbai suburb of Thane, told AFP, adding the accused would face court on Thursday.

Mumbai police in October detained more than 770 people suspected of defrauding Americans by impersonating agents from the US Internal Revenue Service and demanding payments.

The US Justice Department subsequently charged 61 people for involvement in India-based schemes that defrauded nearly 15,000 American citizens.

"We are extremely vigilant when the names of US government agencies are used to perpetuate fraud for the purpose of victimising so many innocent American citizens," US Attorney Kenneth Magidson had said in a statement.

The con artists would use altered caller ID numbers to make it appear they were phoning from the US, and often quoted IRS badge numbers to trick their victims.

Those conned would sent money through pre-paid debit cards, such as Walmart supermarket vouchers or Apple iTunes gift cards.

The scam prompted Apple to issue a global warning against giving card numbers to strangers.

The IRS has for years warned about similar scams.

In January the US Treasury Inspector General for Tax Administration said it was aware of at least 5,000 victims who had been defrauded of more than $26.5 million via such schemes since late 2013.

India became the call centre capital of the world in the early 2000s as foreign firms, drawn by its educated and cheaper English-speaking workforce, farmed out jobs answering customer phone inquiries.-AFP