Accused Neha, who has now been arrested, told police that she did so "due to anger and frustration over looking after the baby girl". Her 25-day-old daughter, who was rescued on Saturday has died.
The incident was reported in east Delhi's Vinod Pur on Friday after the family approached the police stating that the newborn was missing, following which a case of kidnapping was filed.
During the search for the baby, suspicion fell on Neha after a witness told the police that she saw the woman throw something in the garbage dump, a senior police officer said.
During questioning, the accused admitted to the crime and revealed the location where she had dumped the infant.
A police team found the infant alive and rushed her to the LBS hospital. She had sustained fractures in her skull, the officer said.
The baby was later shifted to the GTB hospital, where she died, he added.
(with inputs from agencies)