Pleural tuberculosis (pTB) is a grave clinical challenge. A novel cell-free M. tuberculosis DNA (cfM.tb-DNA) probe-based-qPCR assay was developed for the diagnosis of pTB. Total cell-free DNA was extracted from pleural fluid (PF) and paired plasma samples and cfM.tb-DNA was quantified by probe-based qPCR targeting devR (109-bp) gene of M. tuberculosis in patients with pleural effusion. Patient categorization was done using ‘Composite-Reference-Standard’ formulated for the study. Assay cut-offs were determined from samples in the ‘Development set’ (n = 17; ‘Definite & Probable’ pTB; n = 9 and ‘Non-TB’; n = 8) by ROC-curve analysis and applied to ‘Validation set’ (n = 112; ‘Definite’ pTB; n = 8, ‘Probable’ pTB; n = 34, ‘Possible’ pTB; n = 28 and ‘Non-TB’; n = 42). cfM.tb-DNA qPCR had a sensitivity of 62.5% (95%CI; 24.4,91.4) in ‘Definite’ pTB category and 59.5% (95%CI; 43.2,74.3) in ‘Definite & Probable’ pTB category with 95.2% (95%CI; 83.8,99.4) specificity using PF. In plasma (n = 85), the assay had a sub-optimal sensitivity of 7.6% (95%CI; 0.95,25.1) with 88.2% (95%CI; 72.5,96.7) specificity in ‘Definite & Probable’ pTB group. Xpert MTB/RIF assay detected only six-samples in the ‘Validation set’. Logistic regression analysis indicated that PF-cfM.tb-DNA qPCR provided incremental advantage over existing pTB diagnostic algorithms. To the best of our knowledge, this is the first report describing the utility of cfM.tb-DNA for pTB diagnosis in India.