Purpose: Theory of mind (ToM) is essential in understanding and predicting human behaviour. Parenting plays a significant role in the overall cognitive development of children. This study aims to understand the development of ToM among children in need of care and protection and then to compare the data with children living under parental care and children living in boarding schools. Further, it explores the extent of physical abuse experienced by children in the study and their relation to the development of ToM. Design/methodology/approach: ToM Test developed by Muris et al. (1999) was used to measure ToM. Childhood Experience of Care and Abuse Questionnaire was used to understand the children’s relationship with parents and experience of physical abuse. The study used an ex post facto design with a purposive sampling method. Findings: Findings suggest a significant impact of parental care on the ToM among children. Also, the type of care received mediated the relationship between parental care and the development of ToM. Finally, children living in institutions run by the Child Welfare Department reported that they have received harsher physical punishment from their parents than the other two groups of children. Research limitations/implications: Findings are a significant theoretical contribution to the ToM development in children, especially in the Indian context. Social implications: Findings demand more legal and psychological support to vulnerable children living in institutions run by the Child Welfare Department and boarding schools. Originality/value: The study explores care and abuse from the child’s perspective. Findings are of value to the existing child care system in India. © 2021, Emerald Publishing Limited.