The Indian Army vowed an "appropriate" response to the "despicableact", which significantly took place a day after Pakistan army chief Gen Qamar Javed Bajwa visited some areas along the LoC and promised support to the Kashmiris.
Defence Minister Arun Jaitley said in Delhi that the mutilation of the bodies was "reprehensible" and an "extreme form of barbarism".
He said the armed forces will react appropriately to the "inhuman act" and their "sacrifice will not go in vain".
The army issued a statement saying that the bodies of an army soldier and a BSF head constable were mutilated but a senior army officer told PTI that they were beheaded.
The BAT team had set up an ambush to target the patrol party of the Indian soldiers while the Pakistan Army engaged two Indian forward defence locations (FDL) with rockets and mortar bombs, the officials said.
"The Pakistani army posts attacked two FDL posts with rockets and mortar bombs at 0830 hours and engaged them," the official said.
"Their target was a 7 to 8-member patrol party, which had come out of the post," the official said.
He said as the posts were engaged, the patrol party men ran here and there.
"Two members of the patrol party, who were left behind, were attacked by the BAT team and killed. Their bodies were badly mutilated," the official said.
"Simultaneously, a BAT (Border Action Team) action was launched on a patrol operating in between the two posts," said a statement issued by the Northern Army Command.
"In an unsoldierly act by the Pakistani Army, the bodies oftwo of our soldiers in the patrol were mutilated," the spokesman said, adding "Such a despicableact of the Pakistan Army will be appropriately responded".
The soldiers killed were Naib Subedar Paramjeet Singh of 22 Sikh Infantry and Head Constable Prem Sagar of 200th Battalion of BSF. A BSF constable Rajinder Singh was injured but is out of danger.
It was followed by attack on another forward post in the same area.
As per a senior BSF officer, at about 0830 hours, there was heavy firing from the Pakistani army posts at BSF posts at LoC in Krishna Ghati sector of Poonch district with rockets and automatic weapons.
"They attacked with rockets a forward BSF post (which lies) ahead of the fencing and opened heavy fire from automatic weapons. They violated the ceasefire," the BSF officer said.
Indian troops retaliated and the firing continued for some time intermittenly.
In April this year, there were seven ceasefire violations by the Pakistani troops along the LOC in Poonch and Rajouri sectors of Jammu and Kashmir.
On April 19, the Pakistani troops violated the ceasefire along the LoC in Poonch sector.
Two days prior to that, the Pakistani troops violated the ceasefire by firing and shelling mortars on forward posts in Noushera sector along the LoC in Rajouri district, according to Indian army officials.
They had broken the ceasefire in the same sector on April 8, in Poonch district on April 5, in Bhimbher Gali (BG) sector on April 4 and twice on April 3 in Balakote and (Digwar) Poonch sectors.
There were four violations of the ceasefire along the LoC in Poonch in March.
On March 9, army jawan Deepak Jagannath Ghadge was killed when Pakistani soldiers initiated indiscriminate and unprovoked firing along the LoC in Poonch.
In 2016, there were 228 instances of ceasefire violation along the LoC, while there were 221 instances of ceasefire violation along the International Border (IB).
Disclaimer: No Business Standard Journalist was involved in creation of this content
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