Lalaji was able to return to India only after the war was over in February 1920.Lokamanya Tilak, Jinnah and Shrimati Annie Besant accorded a heroic welcome to him. Welcome Addresses were presented to him in Bombay, Delhi and Lahore. He was elected as the president of the special session of the Congress held in September 1920.
On his return, the Congress invited him to preside over the special session in Calcutta in 1920. Lalaji supported the non-cooperation movement, which was being launched in response to the Rowlatt (Black) Act, in principle. He was skeptical if such a mass boycott comprising of educational institutions, job, law courts and foreign goods was truly achievable. Lalaji nevertheless exhorted the nation to answer the Congress's demand for complete non-cooperation. The Congress started the Tilak Swarajya Fund to raise one crore rupees for the effort. Lalaji collected nine lakh rupees within two weeks for the fund. Lalaji was arrested on December 3, 1921 in Lahore for his activities related to the non-cooperation movement and was imprisoned for a year and a half. The program was a resounding success. The Government machinery, slowly but surely, began to grind to a halt. The Governor General invited Mahatma Gandhi to attend a Round Table Conference in London, Britain.
Lajpat Rai's organizing ability and heroic speeches were inspiring. Government was finding it difficult to face the intense Non-cooperation Movement growing day by day. All over the country there were agitation and hartals and the rulers were shaken. Lalaji became a dangerousperson in the eyes of the government.In December 1921 Lalaji was arrested. The other leaders of the movement, Motilal Nehru and Chittaranjan Das were also imprisoned. Lalaji was sentenced to 18 months' rigorous imprisonment. Because of the people's protest and the pleadings by lawyers he was released after two months. It was one o' clock in the night when he was released. When he came to the door he was arrested again. He was tried for another offence and was sentenced to rigorous imprisonment for two years.While in jail he fell ill and his health deteriorated. When the public learnt this vigorous agitation was started throughout the country for his release. Government released him. Lalaji went to Solan to improve his health.