According to sources, the accused persons are from Jharan Basti in Mancheswar area of the city.
A police team along with forensic experts took the two arrested perons to the spot at Bharatpur forest from where the behaded body of the woman had been recovered.
Police have identified the deceased woman as Puspalata, a resident of Ganjam district. She was also staying in a slum under Mancheswar police limits.
Notably, the beheaded body of a woman in her mid-thirties was recoverd from a desolate stretch in Bharatpur under Chandaka police limits in the city on February 4.
The police seized a knife, a pair of hand gloves and some clothes from the same spot.
Later, the police released posters detailing the physical attributes of the deceased woman and appealed to citizens to call on the helpline numbers 8280338323 and 8280338296.
It also announced a cash award of Rs 50,000 for anyone who helps to identify the woman.