The incident took place under Makkuva police station limits late last night and the couple was identified as Kolluri Pandu (40) and his wife K Seethamma (35), they said.
According to police, immediately after the incident, the bodies were also burnt by the locals, who also severely thrashed the couple's three daughters.
"After a 24-year-old G Srinivas died of mysterious disease in the village a few days back, the villagers attributed the death to evil designs of the couple," Inspector K Ramakrishna said.
"However, the couple denied the charge. The village head then called the panchayat meet on Wednesday morning. However, the relatives of the deceased, who came to the village from neighboring Odisha, beat the couple to death with the support of few locals late last night," he said.
The villagers then burnt their bodies near a canal and threw the ashes into the canal. The couple's elder daughter K Radha called the police and narrated the incident, following which a police team rushed to the spot and registered a case.