Nitin Shisode, 39, was arrested two days ago by the cyber police, Akbar Pathan, Deputy Commissioner of Police (Cyber Crime) said.
During interrogation, it emerged that the Andheri resident also created fake Twitter accounts of some Bollywood personalities, Mr Pathan said.
Cyber Crime cell sleuths seized a laptop, two mobile phones and routers from Mr Shisode's residence, he said.
Mr Shisode, who is in computer and Internet-related business, has been booked for impersonation, cheating and defamation under IPC and the IT Act, he said.
He was produced before a local court and remanded to police custody till tomorrow.
In October last year, there was a tweet from Sara Tendulkar's fake account, containing derogatory remarks about Mr Pawar, a police official said.
An offence had been registered at Cyber Police station based on the complaint of Mr Tendulkar's personal assistant, he said.
Mr Tendulkar's aide said in the complaint that somebody created a fake Twitter account of Sara Tendulkar, who is studying abroad, the official said.
Police traced the IP address from which the comment was posted to Mr Shisode's house in Andheri, he said.