The child, Muskan, was found dead with her throat slit in an orchard near her Laiser village in Dangiwacha area of Rafiabad, a day after she was reported missing by her father Altaf Ahmad Rather on June 14, police said.
A sharp-edged knife, a ten rupee note and an empty jute bag used to contain animal fodder were recovered from the scene of the crime.
Following the incident, a Special Investigation Team (SIT) was constituted under the supervision of Sub-Divisional Police Officer Mushtaq Ahmad and during investigations, the police grew suspicion against the father as she was last seen with him, Deputy Inspector General of Police, North Kashmir, J P Singh said in a statement.
During investigation, it was found from marriage and medical records, that the baby was born prematurely.
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"The father was suspecting that she was not his biological daughter. Over a period of time this developed into an extreme hatred.
"Another motive of killing his daughter was cash compensation from government after putting blame for the murder on militants for the reason that his wife was a Panch (village panchayat member)," Singh said.
On the fateful day, Rather sent his wife to take their son to doctor in Sopore for medical consultation.
"The accused was arrested and circumstantial and scientific evidence corroborate his involvement in the murder," he said.