Mr Akhlaq`s 22-year-old son was also seriously injured in the attack, and has been admitted to a hospital.
Six people have been arrested in connection with the incident. Police are probing who spread the rumour.
Slaughter of cows is a sensitive issue in India as the animal is considered sacred by Hindus, who comprise 80% of the country`s 1.2bn people.
Uttar Pradesh is among a number of Indian states who have tightened laws banning cow slaughter and the sale and consumption of beef.
The beef ban has also provoked outrage with many questioning how the government decides what is on their plate.
Mr Akhlaq`s family said the family had stored mutton, and not beef in their fridge. The police have taken the meat and sent it for testing, reports said.
"Some locals spread rumours that Akhlaq had cow meat at his home and engaged in cow slaughter. Following the rumours, they attacked his home," senior local official NP Singh told The Indian Express newspaper.
Senior police official Kiran S told the AFP news agency that the "announcement about the family consuming beef was made at a [local] temple".
The incident happened in a village, barely 50km (31 miles) away from the Indian capital, Delhi, where Mr Akhlaq, a farm worker, lived with his family.
His 18-year-old daughter Sajida told the newspaper that a "group of more than 100 people from the village" reached the house on Monday night.
"They accused us of keeping cow meat, broke down our doors and started beating my father and brother. My father was dragged outside the house and beaten with bricks," she said.
"We had come to know later that an announcement had been made from the temple about us eating beef...There was some mutton in the fridge...The police have taken it for examination."
Reports said local villagers, protesting against the arrests, had clashed with the police, and damaged a number of vehicles.
Eleven states - including Uttar Pradesh - and two union territories (federally-administered regions) in India ban slaughter of cows, calves, bulls and bullocks.
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