Demanding his body back to their hometown in Sopore, Kashmir, Guru's family members and his wife earlier had sent letters to the ministry.
The home ministry rejected the demand citing jail manuals and possible law and order situation which may arise in Jammu and Kashmir.
Guru, who was hanged and buried inside Tihar jail premise in Delhi on Feb 9, was one of the prime convicts of Parliament attack 2001.
Guru's wife Tabassum, in the letter, had demanded that the mortal remains be handed over to her for "proper burial" in their home state.
Tabassum also had asserted that as Guru's wife she has full right over the body and its formal burial in his home state in keeping with religious traditions.