The incident took place on Sunday night.
Though the accused person was trying to escape with the severed head, the police nabbed him from Harabhangi canal road near Raipur on Monday morning.
The deceased has been identified as Pandav Nayak of Olamba and former head of the village committee, while the accused has been identified as Angada Nayak of the same village.
The accused hacked the deceased while he was returning to the village in the night, police said.
The wife of the deceased, Sabitri, alleged before the police that her husband was killed due to a previous political rivalry with the accused person in the village.
"We dont see any political angle in the murder. Previous enmity might be the cause of the incident, said Das.
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