Sukhdev Singh was arrested from Chandigarh by the Crime Branch team, which is probing 13 cases registered in connection with the Republic Day violence, they said.
The police had earlier announced a cash reward for Singh and three others for allegedly instigating protesters.
The police have also announced cash reward of Rs 1 lakh for information that can lead to the arrest of actor Deep Sidhu, Jugraj Singh, Gurjot Singh and Gurjant Singh who hoisted flags at the Red Fort or were involved in the act.
A senior police officer said Singh was allegedly leading the mob at the Red Fort on the day of incident and he was found to have an “active presence” at the spot.
So far, a total of 127 people have been arrested in connection with the Republic Day violence across the national capital, police said.
Thousands of farmers protesting the Centre’s new agri laws had clashed with the police during the tractor parade on January 26.
Many of the protesters, driving tractors, reached the Red Fort and entered the monument. Some protesters even hoisted religious flags on its domes and a flagstaff at the ramparts, where the national flag is unfurled on Independence Day.