Ravikant Prasad, the owner of Sonali Jewellery, was shot dead in broad daylight near Rajapurpool area here.
"The victim died on the spot," police said.
Senior Superintendent of Police Manu Maharaj said police have identified the killer. "Police will make a breakthrough in the case within 24 hours."
According to police officials, Prasad's family informed police that Durgesh Sharma, a notorious criminal, had been trying to extort money from him.
"Durgesh had threatened to kill him," officials said.