He was arrested from near the Sector-43 inter-state bus terminal by a team comprising personnel from the Punjab Police's Intelligence Wing, the Jalandhar Rural Police and the crime branch of UT Chandigarh police.
Singh suffered a bullet injury to his thigh in retaliatory fire by the team, the official said, adding that he was admitted to the PGIMER here.
He was a category 'A' gangster and accused of attacking Punjabi singer Parmish Verma this year, he said.
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The singer and his friend were shot at by at least five unidentified car-borne assailants in Mohali in April, and, later, Singh in a Facebook post had taken responsibility for the attack.
SSP (Jalandhar Rural police), Gurpreet Singh Bhullar told reporters Dilpreet was coming in a car bearing Haryana registration number.
When he tried to escape, his car was blocked by the vehicle of a police team.
SSP Bhullar informed that Dilpreet tried to flee from the spot and opened fire at the police team. He sustained injuries in retaliatory fire.
The Punjab Police recovered one .30 bore pistol along with cartridges, one .30 bore rifle along with 28 cartridges, 59 cartridges of .12 bore, one belt of cartridges, fake beard and moustaches, two fake number plates, three hockey sticks and one iron rod from his car, the SSP said.
Bhullar said Dilpreet had made his hideouts in other states and his accomplice Rupinder Kaur, a resident of Sector 38, Chandigarh and her sister Harpreet Kaur, resident of Nawanshehar were also interrogated.
The SSP informed that during a raid at Nawanshehar, one pump action rifle, one pistol along with 40 cartridges, one kg heroine, one electronic weight machine and one mobile phone have also been recovered.
Dilpreet was among the most-wanted gangsters of Punjab and wanted in over 30 criminal cases, including three murder and nine attempt to murder cases, in several states, including Punjab, Haryana and Maharashtra, and Chandigarh, he said.
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The gangster, a resident of Dhahan village in Punjab's Rupnagar district, is also accused of making extortion threats to renowned singers and artistes of the state, the spokesman said.
He had allegedly threatened Punjabi actor and singer Gippy Grewal and demanded extortion money from him in June.
The attacks and threats had terrorised the Punjabi film and music industry, the spokesman said.
Singh is an accused in the last year murder case of a sarpanch in Chandigarh. The spokesman said investigations are underway.