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The incident took place in Gorakhpur and the man was arrested on Friday based on a complaint filed by his elder daughter.
The police said the man raped his younger daughter several times in the past two years and then killed and decapitated her on the night of July 26.
He buried the severed head in the Urwa area and threw the lower part of the body in a drain.
Senior Superintendent of Police (SSP) Sunil Gupta said: "During interrogation, the accused admitted before the police that he raped his daughter several times in the last two years and also killed her."
The wife of the accused had died 15 years ago and his elder daughter was married in 2015. He was living with the younger daughter.
The elder daughter grew suspicious when her sister did not visit her on Raksha Bandhan. When she inquired about it, the accused told her that he had killed his younger daughter.
"Police have recovered the body parts. A case of murder and rape has been registered against the man and he has been sent to jail," the SSP added.
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