The student had come to the house of a retired Deputy Tahsildhar, Rajamanickam (75) yesterday, and had asked for water from his 70-year-old wife.
As soon as she went inside, he stole the money, which the couple had drawn from the bank, left on a bench in the house, police said.
The couple lodged a complaint with police and even as investigations were on, the boy arrived on his motorcycle today to hand over Rs 4.5 lakh.
The deputy tahsildhar (retd) told police he did not want to pursue the complaint as he got back the money.
Police said they would release the student after questioning him.