Justice Anand, 81, is survived by his wife and three daughters.
The sources said he passed away this morning after suffering a massive heart attack.
The mortal remains of the 29th Chief Justice of India would be cremated on December 3 at the Lodhi cremation ground here, they said.
Prime Minister Narendra Modi expressed grief at the passing away of Justice Anand.
"Saddened by the demise of former Chief Justice of India, Justice AS Anand. My thoughts are with his family in this hour of grief. May his soul rest in peace," Modi said in a tweet.
Anand, who was also the Chairman of National Human Rights Commission from 2003 to 2006, had penned the landmark verdict in the D K Basu case, laying down guidelines on arrest, custodial torture and protection of prisoners' rights.
Born on November 1, 1936 in Jammu and Kashmir, he had graduated from the Jammu and Kashmir University and obtained his law degree from the Lucknow University.
Justice Anand practiced law in the Punjab and Haryana High Court at Chandigarh and was appointed as an additional Judge of the Jammu and Kashmir High court in 1975. He was confirmed as a permanent Judge of the same Court in February, 1976.
Justice Anand was elevated to the Supreme Court in November 1991 and subsequently became the CJI in 1998.
He had also authored a book titled "The Constitution of Jammu and Kashmir - Its Development and Comments".
He was unanimously elected as the President of the International Institute of Human Rights Society in 1996.
He had participated in various national and international conferences including the first Appellate Judges Conference at Manila (Philippines) in 1977, 2nd Worldwide Common Law Judiciary Conference at Washington in 1997 and the SAARC Chief Justices' Conference at Colombo in October, 1998.
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