The incident took place this morning at Matadin ka Pura village in Soraon police station area of the district's trans-Ganga region, about 40 kms from the city.
The retired army jawan Kapil Deo (55) was getting some construction work done on a piece of land, the ownership of which is in dispute, police said.
When his neighbours objected to the construction work, Deo fired shots in the air from his licensed firearm to scare them away but one of the bullets hit 25-year-old Amar Bahadur Patel, killing him on the spot, police added.