Pervez Ahmed Tak, who is now in police custody and is said to be a family friend, said she was murdered with her family in Mumbai, reports said.
Laila's mother Saleena Patel, sister Azmina, brother and a cousin were missing along with her from Mumbai since Feb 2011.
Her father Nadir Patel, who was divorced from her mother who had remarried, had filed a police complaint.
Laila Khan is a Pakistan born actress and had acted opposite Rajesh Khanna in the 2008 Bollywood movie Wafa: A Deadly Love Story.
Laila had married Munir Khan, a member of the Bangladeshi terror outfit Harkat-ul-Jihad al-Islami, reports said.
Laila's husband is close to gangster Dawood Ibrahim, according to reports.
Maharashtra Anti-Terror Squad (ATS) had suspected Laila Khan of having links with the Pakistani spy agency ISI and the terror group Lashkar-e-Taiba (LeT).
Laila's SUV was allegedly used for carrying explosives that were used in a blast before the Delhi High Court in Sept last year.
