Here's your 10-point cheatsheet to this big story:
Speaking on the 30th anniversary of diplomatic ties between India and Israel, PM Modi said the cooperation between them has played a key role in growth stories of both countries.
Pegasus has been in the centre of a big controversy over its alleged use against the public, military and civil officers, politicians, activists, judges and journalists for illegal surveillance. The report by The New York Times said Pegasus and a missile system were the "centrepieces" of a $2 billion deal in 2017 when Prime Minister Narendra Modi visited Israel - the first by any Indian Prime Minister.
Congress leader Rahul Gandhi led the attack on the government over the issue, tweeting,"Modi government bought Pegasus to spy on our primary democratic institutions, politicians and public. Government functionaries, opposition leaders, armed forces, judiciary all were targeted by phone tapping. This is treason. Modi government has committed treason."
Union Minister General VK Singh hit out at the New York Times. "Can you trust NYT?? They are known "Supari Media," he tweeted.
The Congress's latest attack focuses on what the Defence Ministry said in parliament, that it has not made any transaction with the Israeli firm NSO. Under pressure after the NSO group - which said it does business only with governments and government agencies - the government had told parliament that no illegal interception has been done. The government has, however, never said in an affidavit or in parliament that it has not bought Pegasus.
A technical committee appointed by the Supreme Court earlier this month sought information from people who suspect their phones were targeted. Overruling virtually every argument made by the centre, the Supreme Court said privacy is not the singular concern of journalists or social activists but of every citizen.
The Pegasus matter is being monitored by a committee under the Supreme Court and its report is awaited, news agency PTI reported quoting an unnamed source. "Matter (is) already with the Supreme Court. The court has constituted a committee under the supervision of retired judge Justice Raveendran. The committee's report (is) awaited," the source said.
"The Modi government lied to the Supreme Court when it was directly questioned about the purchase and deployment of Pegasus. In a sworn affidavit, the government said 'unequivocally we deny any and all of the allegations made against the government'," Congress leader Randeep Singh Surjewala said at a news conference on Saturday.
The Congress has alleged the Pegasus spyware can hack into mobile phones, activate microphones and cameras and take photos. "Data from SMS to family photos to WhatsApp chats is stolen in illegal ways and sent to Modi's agencies. All these can be used against you," Mr Surjewala said.
He alleged the spyware was used against Rahul Gandhi and five of his staff, HD Deve Gowda, Siddaramaiah, HD Kumaraswamy, Vasundhara Raje, Praveen Togadia, Smiriti Irani's officer on special duty, Supreme Court judges, Alok Verma, KK Sharma, Jitendra Kumar Ojha, lawyers, activists and journalists.