Udupi police recovered the lifeless body of the infant wedged onto a low-lying tree branch over the Kubja river on Friday.
According to a relative, the 24 year old acted on the behest of a astrologer who predicted the baby will bring him misfortune.
Two years ago, the police had lodged a case of sexual harassment against the suspect, 60-year-old Jagadish Machimada, and the case was being heard at a local court.
According to the police, the victim, Anjana Vasista, refused to marry Sandeep Rathod, which led to an argument between the two.
Police arrested the man on Thursday, three days after he allegedly killed his daughter.
Shreemathi Shetty was allegedly murdered by Jonas Samson and Victoria Mathias, and her body parts stuffed in a gunny bag and placed in three different areas in the city.
The police suspect that the motive could be a tussle over trespassing.
At his home in Ganeshkatte in Katipalla, he lived with his 55-year-old mother and 24-year-old brother,