Passersby in the hill town of Shimla spotted the monkey with a bundle of notes on Sunday after it broke into a construction site in search of food.
Finding nothing to munch on, it stole 10,000 rupees ($165) that a contractor had planned to pay his labourers, according to the Amar Ujala newspaper.
"I was returning from the nearby temple when I suddenly saw some people looking up at currency notes flying. I noticed a monkey was dropping them from a tree," resident Ashok Kumar told AFP.
"I also joined the crowd and picked up two notes of 100 rupees ($1.65) each."
Workers at the construction site tried in vain to catch the thieving primate, who playfully tossed down money from a rooftop before continuing the handouts from a tree, with an eager crowd gathering to catch the cash for nearly an hour.
Shimla, capital of the mountainous state of Himachal Pradesh, has a ballooning monkey population and wildlife officials say the animals often harass residents and tourists.
Monkeys are revered in Hindu-majority India -- but the animals can be a menace, trashing gardens, offices and residences and even attacking people for food.
The Indian government has hired 40 "monkey men" tasked with mimicking the screeches and hoots of aggressive monkeys in a bid to keep the animals at bay.
This is not the first time a monkey has played Robin Hood in Shimla. In February, a monkey stole a bag of cash and showered it over a crowded street in the town, to the delight of passersby.
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