The incident also left three Pakistani civilians wounded, reports AP quoting officials of the both countries.
Lt Col Devender Anand, a spokesperson of Indian Army, said Pakistani troops opened fire on Indian positions along the Line of Control (LoC) late Friday, forcing them to retaliate in a befitting manner.
At one stage, a shell hit a three-member Indian family, leaving them dead on the spot, he said, adding that the family was cooking food during the incident, Indian Administrator Rahul Yadav was quoted as saying.
Lt Col Anand described the incident as an ‘unprovoked violation of ceasefire accord between the two neighbouring countries.
The Foreign Ministry of Pakistan issued a press release in this regard and disclosed that two pakistani women received injuries during the fight.
It also brought an allegation against India of violating cease-fire agreement and =summoned an Indian diplomat to protest the incident.
In the past, each side has accused the other of starting border skirmishes in Kashmir, which is divided between the two countries but claimed by both in its entirety.
There has been almost daily fighting between Indian and Pakistani soldiers over the last several months along the rugged and mountainous frontier, leaving dozens of civilians and soldiers dead on both sides.
India's military says Pakistan has so far this year has committed more than 2,500 cease-fire violations. Pakistan says India has violated the cease-fire about 1,700 times this year.