After crushing the women, the tempo collided with an autorickshaw, injuring its driver seriously, they said.
Earlier reports had said three persons had been killed in the accident.
The mishap occurred at around 10 AM when the speeding tempo hit two sisters, identified as Manibai Solanki (45) and Ganga Pulsi Purabhia (50), while they were trying to cross the road in Vasant Vihar area.
Both died on the spot, police said, adding that the head of one of the victims was cut off in the accident.
The autorickshaw driver was rushed to a hospital where his condition was stated to be serious, police said.
Meanwhile, police managed to nab the tempo driver Amol S Kamble (25), who had fled soon after the accident.
Later, angry residents gheraoed Thane Mayor Harish Patil, who rushed to the spot, over no traffic police being deployed for manning the busy crossing.
