The victim, Kondam Mahender Reddy (45), had apparently been demanding money from his father-in-law Guda Raji Reddy, Kamalapur police sub-inspector V Ganesh said.
Irked with his demands, Raji Reddy hit his son-in-law with an axe while he was sleeping in the former's house at Gudur village under Kamalapur police station limits, about 60 kms from here, at around 11.30 PM last night, he said.
Mahender Reddy was taken to MGM Hospital in Warangal, where he succumbed to his injuries this morning.
The victim's body was handed over to his family members after a postmortem at Government Hospital in Huzurabad, he added.