The 'militant' was trapped in a house after throwing a grenade at a police checkpoint in the northern village of Ladoora.
"He was one of the most wanted separatist and the chief operational commander of JeM," Kashmir inspector-general of police, Muneer Ahmed Khan said.
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"He threw a grenade at the checkpoint which failed to explode. He then fired a pistol and took refuge in a nearby house where he was killed."
Freedom fighters have for decades fought Indian troops in the restive territory, demanding independence or a merger of the former Himalayan kingdom with Pakistan. The fighting has left tens of thousands dead, mostly civilians.
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