According to the latest data from the Society of Indian Automobile Manufacturers (SIAM), MSI's new Dzire clocked sales of 31,427 units in September, more than 23,830 units of the Alto.
In August, Dzire had beaten Alto for the first time clocking sales 26,140 units against 21,521 units of Alto.
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Alto had been the undisputed best selling model in India for over a decade.
Six out of the top 10 selling passenger vehicle models in September were from the stable of Maruti Suzuki India (MSI). The remaining four models were from Hyundai Motor India and Renault India.
Among the top 10 best selling models in September this year, MSI's premium hatchback Baleno came third with 16,238 units as against 10,623 units in the same month last year.
The company's compact car Wagon R stood fourth with sales of 14,649 units. It was third in September 2016 with sales of 16,645 units.
Rival Hyundai's hatchback Grand i10 was at the fifth position last month with sales of 14,099 units. The model had sold 12,212 units in September last year.
MSI's Compact SUV Vitara Brezza stood at sixth position with 13,268 units. It was at the ninth position in September last year with sales of 9,375 units.
The company's Swift occupied the seventh spot with 13,193 units. It was third in the year-ago month with sales of 16,746 units.
Hyundai's premium hatchback Elite i20 stood at the eighth position last month with the sale of 11,574 units, while its SUV Creta was placed ninth with sales of 9,292 units.
Renault's Kwid completed the list at the tenth position with sales of 9,099 units.