The shootings were the deadliest attack on military forces in the area in more than six months.
What do we know so far?
According to an Indian army spokesman, troops were conducting a search operation near the southern Surankote area after reports of militant presence.
Lieutenant Colonel Davinder Anand said the troops came under heavy fire. Four soldiers and an army officer were critically wounded.
"They were moved to a nearby medical facility but succumbed to their injuries," said Anand.
Reinforcements have been sent to the area and, according to the Indian army, fighting continues.
How India's Kashmir region lost its autonomy
No claim of responsibility
It's not immediately clear who was behind the attack, as no militant group has claimed responsibility. However, in the run-up to this latest incident, a series of killings in the city of Srinagar resulted in a government crackdown.
Hundreds of people have been detained following the recent killings of a Kashmiri Hindu chemist, two Hindu schoolteachers and a Hindu food vendor.
Both India and Pakistan claim the Muslim-majority territory, which is administered in parts by the two countries. Tens of thousands of people have been killed in the conflict since late 1989.