The killings took place in the Mainpuri district of the northern Indian state of Uttar Pradesh Thursday, following an argument earlier that day.
The couple, who belonged to the lowest rung of India's caste hierarchy,
had owed upper-caste shopkeeper Ashok Mishra 15 rupees (22 U.S. cents) but said they were unable to pay back the money, authorities said.
According to police, eyewitnesses said the couple, who were referred to as Bharat and Mamta, had told Mishra they would pay back their debt at the end of the day, once they had received their wages as laborers.
After a heated argument about 6 a.m. local time, as the couple headed to work in nearby fields, police say Mishra went home, grabbed an ax, and attacked the couple. Both died.
"It is not clear yet if the shopkeeper had some previous vengeance against the couple," said Digambar Kushwaha, a local police official.
"The attacker has confessed his crime to the police. The role of shopkeeper's wife in this incident is not clear yet. We are investigating.
"We are also probing some eyewitnesses to find out why no one tried to stop the shopkeeper."
Kushwaha said the shopkeeper told police that the couple had verbally abused him.
The attacker and his wife have both been arrested and the weapon used in the attack recovered, he said.
Bharat and Mamta leave behind four children -- three of them minors, according to authorities.
The Dalit community in the village has blocked roads and protested over the incident.
Dalits, as India's lowest caste, have long been vulnerable to discrimination and acts of violence.
The caste system is officially abolished in India but social hierarchies often contribute to crime and atrocities across the country.