Background: Considering the importance of exploring the development of reasoning skills during preschool period and the suitability of using a culturally linguistically relevant story-based approach for the same, the present research intended to profile the reasoning skills in typically developing Indian preschool children between 36 and 72 months using a story-based approach. The specific objectives were to develop explanation, prediction, and inference based reasoning tasks around a story and assess the reasoning skills in typically developing Indian preschool children using the same. Method: Reasoning tasks across explanation, prediction, and inference domains were developed based on a story and evaluated for its psychometric properties. The developed tasks were then administered to 63 typically developing Indian preschool children attending English medium schools in Mangalore. The preschoolers were equally divided into three age groups, and the responses obtained across the age groups were analyzed quantitatively and qualitatively. Results: The developed tasks were confirmed to have good psychometric properties like content validity and reliability. The age comparisons of reasoning abilities using one-way ANOVA suggested an increase in reasoning abilities with age during the preschool period. The qualitative analysis further suggested that with increasing age, the nature of reasoning changed from content-based reasoning to reasoning based on prior knowledge which was integrated with the story content. Conclusion: The study describes reasoning skill development using a story-based task in Indian preschoolers. The study findings further provide clinical and educational implications to assess and foster reasoning abilities among preschoolers.