Latest reports say that the crash happened due to a technical snag.
Officials said that so far five bodies have been recovered and the searches are on.
The Srinagar airport has been closed for operations.
The villagers said a team compromising army troopers, state police, and a forensics team arrived at the site nearly immediately and dragged the bodies of the pilots from the wreckage.
Police has rushed to the spot and are verifying the incident, he said.
The IAF also said a Pakistani F-16 aircraft had crashed in the Lam Valley area along the Line of Control, reported NDTV.
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The chopper broke into two and caught fire immediately. Eyewitnesses said soldiers fired in air to keep residents away from the crash site.
Indian Air Defence Systems have been put of maximum alert.
New Delhi blamed Islamabad, which denies having a role in the attack. An Indian military statement said that "out of anger and frustration", Pakistan "initiated unprovoked ceasefire violation".
On February 20, one pilot was killed when two Surya Kiran Acrobatic team aircrafts collided mid-air during AeroIndia 2019.
Also, for the armed and para-military forces, Air India has waived off fees for journey date changes up to the first week of March, the source added. India has said that a terror camp run by Jaish-e-Mohammad was destroyed and a large number of terrorists were "eliminated".
Both India and Pakistan claim all of Muslim-majority Kashmir, but control only parts of it.