A manhunt was launched by angry villagers after Manu Sagar's headless body was found by his parents in the remote settlement.
His suspected killer, Tirumala Rao, 35, was tracked down, tied to a tree and doused in petrol by angry villagers, who then set him on fire.
Police in Pokur in the Prakasam district of southern India said that it appeared to be a case of human sacrifice, according to The Times of India.
Rao is accused of kidnapping and killing little Manu to offer him up as a sacrifice to the Hindu goddess Kali.
It is believed he thought he would achieve power and wealth.
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