Abstract: The present invention provides system and method for adaptive application and privacy preserving internet of things. The system comprises of at least one configured IoT device(s) (A) for receiving, processing, filtering, storing and transferring limited information to at least one receiving IoT device(s) (R1, R2, . . . , Rn), at least one inputting IoT device(s) (ID1, ID2, . . . IDn) for transferring information to said IoT device(s) (A), at least one memory unit (M) for storing processed information in said configured IoT device (A), at least one communication interface (C) for communication between IoT device(s), at least one receiving IoT device(s) (R1, R2, . . . Rn) to receive processed information from said configured IoT device (A) as per the information flow policies (P) thereby limiting the type and amount of private information that can be supplied or leaked to the public from one IoT device irrespective of the application running on the IoT device.