Kashmir has been divided between the neighbours since they were carved out of the Asian subcontinent at the end of British colonial rule in 1947.
Both nations claim it in full and have fought two wars and numerous smaller battles over control of the Himalayan territory.
Pakistan state broadcaster PTV, citing unnamed security sources, said Wednesday's incident injured two soldiers and two civilians, all from that country.
Unnamed Indian security officials told broadcaster NDTV that Pakistani troops had fired unprovoked, prompting India's forces to return fire.
Pakistan's military declined to comment when asked by AFP. India army officials did not respond to a request for comment.
The incident comes two days after two Indian army soldiers were killed by an improvised explosive device in the region.
A border ceasefire agreement signed by the neighbours in 2003 has largely held in the decades since, but both frequently accuse the other of breaching it.
Last month, India's army said its soldiers killed two rebel fighters along the Kashmir border as they attempted to cross into the Indian-administered territory.
Several rebel groups have fought Indian forces deployed in the territory, demanding independence for the Muslim-majority region or its merger with Pakistan.
Tens of thousands of people have died in the conflict, most of them civilians.
Fighting has decreased since 2019, when Indian Prime Minister Narendra Modi's government imposed direct control of the territory from New Delhi after cancelling its partial autonomy.
But last year, thousands of additional troops were deployed across the southern mountainous areas following a series of deadly rebel attacks that left more than 50 soldiers dead in three years.
India regularly blames Pakistan for pushing rebels across their shared frontier to launch attacks on Indian forces.
Pakistan denies the allegation, saying it only supports Kashmir's struggle for self-determination.
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