Sepoy Bhikale Uttam Balu of 2 Maratha Light Infantry was honoured in a small ceremony by his fellow soldiers in his battalion, a defence spokesman said.
Wreaths were also laid on behalf of General Officer Commanding (GOC), White Knight Corps and other senior officers to commemorate his sacrifice, he said.
Later his mortal remains were sent with full military honours to his native village in Kolhapur district of Maharashtra, the spokesman said.
Sepoy Bhikale was killed in an encounter with terrorists near the Line of Control in Nathua Tibba area of Akhnoor sector yesterday.