The 27-year-old man visited the four-year-old’s mother at her home in Khopoli town in Maharashtra, India.
When the woman snubbed and reprimanded him in public, the man decided to take revenge, Raigad superintendent of police Anil Paraskar said.
After taking the girl and gagging her at his home, the suspect is thought to have sexually assaulted and then killed her.
The man then severed the girl’s head with a kitchen knife and dumped her torso about 300m behind the house.
He is accused of then leaving her head nearby having peeled off the skin so authorities could not identify her.
The case follows a string of high profile sex attacks in India, with huge crowds protesting the alleged rape of a teenager by a ruling party politician in the state of Uttar Pradesh in April.