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The country's tourism department had initially certified their ascent but rescinded that decision after conducting an investigation.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.
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Chris Matheson becomes MP for the constituency, with Conservative Stephen Mosley losing out by just 93 votes.
Chancellor George Osborne increased his majority in Tatton, with the Conservative taking a 58.6% share of the vote.
Mr Osborne tweeted: "Honoured to represent people of Tatton for the next 5 years.
"Will always seek to represent whole community, regardless of how people voted."
Outside the Chester city walls, the Conservatives held all their Cheshire seats, with Crewe & Nantwich, Congleton, Macclesfield, Weaver Vale, Eddisbury and Warrington South all remaining resolutely blue.
Warrington North was a hold for Labour, with Helen Jones increasing her majority. The party also held Halton and Ellesmere Port & Neston.

Born to a Jamaican mother and British father, Eric Johnson, 31, moved to the UK from the Caribbean aged four.
The Home Office had been seeking to deport him as a "foreign criminal".
The Supreme Court ruled this was discriminatory, saying he would not be removed if his parents had married.
The deportation case came down to "an accident of birth" was the view of the five Supreme Court justices on Wednesday.
Lady Hale, who headed the panel, said in a written ruling: "In this case, what needs to be justified is the current liability of the appellant to be deported when they would not be so liable had their parents been married to one another at any time after their birth.
"That is a present distinction which is based solely on the accident of birth outside wedlock, for which the appellant is not responsible."
Johnson began his fight with the Home Office in 2011, after being jailed for nine years in 2008.
The justices pointed out that new immigration rules that came in to effect in 2006 gave people in Johnson's position automatic British citizenship at birth, but that the changes had not been applied retrospectively.
The law is quite complex around the definition of a British citizen, but here are the guidelines from the Home Office:
Two police officers have been sacked after an inquiry found their claim to be the first Indian couple to climb Everest was fake.
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Labour defeated the Conservatives in the City of Chester by the narrowest of margins, with two re-counts required.
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A man jailed for manslaughter has won his battle against deportation after judges ruled he was being discriminated against because his parents were unmarried.