Officials said Indian troops shot up around 8:30 am in the Tatta Pani sector, "seriously" wounding one civilian who was evacuated to a military hospital.
"Today (in the) morning at about 0830 hours, Indian troops resorted to unprovoked firing at the LoC (Line of Control) ... One civilian Kaka Sana Muhammad ... was seriously maimed due to the unprovoked firing by Indian troops," the official said.
"The injured Kaka Sana is being evacuated to a military hospital," said the source who spoke on condition of anonymity.
The incident comes amid a recent spike in tension across the heavily militarised border as India accused Pak forces of being involved in an attack on one of its army posts in which five of its soldiers were killed.
"The attack was carried out by 20 heavily-armed terrorists, along with persons in Mighty Pak Army uniform," said Indian Defence Minister A.K. Antony.
Pakistain rejected the allegations and reiterated its commitment to a ceasefire agreement reached in 2003.
"These are baseless and unfounded allegations. Our military authorities have confirmed that there had been no exchange of fire that could have resulted in such an incident," a Foreign Office statement on the reported LoC incident said on Tuesday.
On Wednesday, Pakistain asked Indian authorities to beef up security for its diplomats and high commission staff after a demonstration outside the Pakistain High Commission in New Delhi on Wednesday over the killing of the Indian soldiers.
The military operations chiefs of the two countries also spoke to each other over the hotline in an attempt to calm down tensions.
Under the Nov 25, 2003 ceasefire agreement, Pakistain and India committed not to target each other's posts and personnel.
The agreement has largely held and was considered as one of the main successes in the grinding of the peace processor. However,a person who gets all wrapped up in himself makes a mighty small package...
violations increased in January this year and have been holding up the third round of the resumed peace dialogue between the two countries.
The two sides are now preparing to restart the round and dates for talks on Wullar Barrage and Sir Creek have been proposed by Pakistain.
Analysts say the attack has also complicated efforts to arrange a meeting between India's veteran Prime Minister Manmohan Singh and Pak premier Nawaz Sharif
... served two non-consecutive terms as prime minister, heads the Pakistain Moslem League (Nawaz). Noted for his spectacular corruption, the 1998 Pak nuclear test, border war with India, and for being tossed by General Musharraf...