Dinesh and Tarakeshwari Rathod said last year that they had successfully reached the 8,850m (29,035ft) summit.
But police in Maharashtra state on Monday confirmed the couple had "morphed photographs" to show a successful ascent on 23 May.
The inquiry was launched after the pair's claims were queried by climbers.
Additional Commissioner Sahebrao Patil told the PTI news agency that the couple "shared misleading information" and "brought disrepute to the Maharashtra Police department".
It's not clear if the couple will also face charges.
Nepalese authorities also imposed a 10-year mountaineering ban last year on the couple after concluding that their claim was fake.
The country's tourism department had initially certified their ascent but rescinded that decision after conducting an investigation.
Mr and Mrs Rathod initially told reporters that their pictures were real.
But a climber based in the southern Indian city of Bangalore, Satyarup Sidhantha, later told the media that the photographs presented by the Rathods as "proof" of their climb actually belonged to him.
Suspicions were further aroused because of the time lag between the day the Rathods claimed to have reached the summit and their news conference announcing their achievement.
It was alleged that the couple could not possibly have reached the summit so soon after they were seen to have arrived at the base camp, and that the photos appeared to show them in two different sets of clothes and boots while on the climb.
Many of those who have succeeded in scaling the 8,848m (29,029ft) mountain have subsequently gone on to have lucrative careers as motivational speakers and authors.
Mountaineering is a major source of income for impoverished Nepal.
More than 450 people, including more than 250 foreigners, climbed Everest during the spring season last year. It followed two consecutive years of poor weather - made worse by the Nepal earthquake of 2015 - which resulted in almost all Everest attempts being abandoned.