The Task Force sleuths had busted a prostitution racket on August 31 at a hotel in Banjara Hills area, which allegedly involved the actress who had won national award for best child artist in the past.
Balu, an assistant director in Tollywood who acted as her agent, was arrested.
Additional Deputy Commissioner of Police N Koti Reddy today said during questioning the actress revealed that she got into prostitution as she was not getting film offers any longer, and was financially in dire straits.
"The actress is a victim; she has not been arrested.
She has been sent to a rescue home, while Balu was arrested under Prevention of Immoral Trafficking Act," Reddy said.