Four Pakistani soldiers were killed on Sunday when their army vehicle was struck by Indian shelling from across the Line of Control (LoC) that separates parts of Kashmir held by both countries, the Pakistani military said.
India's ministry of defence Lieutenant Colonel Rajesh Kalia said he had no knowledge of the incident.
India and Pakistan have been in confrontation for decades across the LoC. The old ceasefire line runs through a region that both countries claim in full but rule in part.
Growing exchanges of fire in past months have frayed a 2003 truce.
"Indian troops targeted an army vehicle moving along LoC ... The vehicle fell into the river and four soldiers have drowned," Pakistan's military said in a statement.
One body has been recovered from the Neelum River and a search is underway for the remaining three, the military said.
In November a civilian bus was hit by Indian firing in the same region, killing 12 people.
Pakistan's military said it had responded to the ceasefire violation by firing at Indian soldiers.
In May India accused Pakistani forces of killing two soldiers patrolling the LoC and mutilating their bodies.
Pakistan's military denied the allegations and said it had not committed ceasefire violations.
Both sides have previously accused each of violating the ceasefire and of beheading soldiers in the past.
India accuses Pakistan of backing Islamist militants and encouraging them to attack Indian forces in Indian-controlled Kashmir and, occasionally, in other parts of India.
Pakistan denies that and says India must hold negotiations on the future of Kashmir.