A red alert implies a "very high likelihood" of people developing "heat illness and heat stroke", and calls for "extreme care" for vulnerable people, according to the India Meteorological Department.
India has been grappling with unusually high temperatures this summer, and the weather department has said "heat wave to severe heat wave" conditions are likely to continue in several parts, including the capital, through Wednesday.
India declares a heat wave when the maximum temperature of a region is 4.5 C to 6.4 C higher than usual, while a severe heat wave is declared when the maximum temperature is 6.5 C higher than normal or more.
Local weather stations in Delhi's Mungeshpur and Narela neighbourhoods recorded a temperature of 49.9 degrees Celsius on Tuesday - an all time record for the city and 9 C above normal.
Delhi's local government also restricted the supply of water because of the heat. It said water levels in the Yamuna River, the main source, were low.
The city does not have uninterrupted water supply at any time, but the government said neighbourhoods which received water for some hours two times a day would be subject to further restrictions.
"I appeal to all the residents that whether there is a water problem in your area or not, please use water very carefully," the local government's Water Minister Atishi, who used only one name, said on Tuesday.
Billions of people across Asia, including India's neighbour Pakistan, have been experiencing a hotter summer this year - a trend international scientists say has been worsened by human-driven climate change.
Three more deaths were attributed to heat stroke on Tuesday in Jaipur in Rajasthan state, local media reported, taking the city's toll to four and that of the state to at least 13.
Rising temperatures also prompted India's polling body to make additional arrangements when Delhi voted in the national elections last week, including deployment of paramedics at polling stations, which were also equipped with mist machines, shaded waiting areas, and cold water dispensers.
The elections conclude on June 1 with counting set to take place on June 4.
