In an interview with the Associated Press news agency, Punjabi Hafiz Saeed said that such rewards 'are usually for those who live in caves and mountains'.
Mr Punjabi Saeed travels widely in Pakistan from his base in the city of Lahore.
He now heads the Jamaat-ud-Dawa (JuD) group, widely seen as a LeT front.
LeT is blamed for the 2008 Mumbai attacks in India. The three-day rampage by 10 gunmen in November 2008 left 165 people dead. Nine of the attackers were also killed.
Local media on Wednesday quoted Pakistan interior ministry sources as saying that the government cannot proceed against Mr Saeed without 'hard and undeniable evidence that can withstand judicial scrutiny'.
He has consistently denied any suggestion that either he or JuD - which he says is a charity - played any role in militant violence.
Pakistan arrested LeT's senior leaders after the Mumbai attacks. But most of them, including Mr Saeed, were later freed on appeal.
As a defiant Lashkar-e-Taiba chief Hafiz Mohammed Saeed mocked the United States, Washington clarified its offer of $10 million bounty was not for finding him, but for information leading to his arrest and conviction.
'Just to clarify, the $10 million is for information not about


his location, but information that leads to an arrest or conviction,' state department spokesman Mark Toner told reporters on Wednesday as the alleged master.