Terming the claims "unsubstantiated and unwarranted", government sources told The Express Tribune that National Database and Registration Authority (NADRA) records have revealed that Usman Khan is not a Pakistani national.
"NADRA record shows Indian claims of an arrested person, Usman Khan, originating from Pakistan are totally baseless," the source said.
Indian forces captured a man on Wednesday after a deadly attack on a military convoy in Indian-administered Kashmir and claimed he was of Pakistani origin. Two soldiers were killed and eight others injured in the attack mounted by a group of militants.
Read: Blaming Pakistan for Gurdaspur attack 'unfortunate', says FO
The militants fled into a forest, taking three passersby hostage. Soldiers later stormed a hilltop school where they were holed up, killing two of them and capturing one, officials said.
"In our preliminary questioning, he has said he is from Faisalabad, Pakistan," Danish Rana, inspector general of police, told reporters. He identified the man as Usman, 22.
"We are going to find out what route he has taken, what was the target," he said.
The accusation raised further tension between the neighbours following a recent attack on an Indian police station in which seven people were killed and intermittent clashes along the Line of Control and Working Boundary.
Read: Gurdaspur attack exposes India's 'soft border', unprepared police
Last week, gunmen stormed a police station and killed seven people in India's Punjab state, south of Kashmir. India said the gunmen had come from Pakistan, according to an analysis of a GPS tracking device they carried. However, Pakistan rejected the assertion that the gunmen involved in the Punjab attack came from Pakistan, calling it “unsubstantiated and unwarranted”.
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