At his Elumbulsherry village in Palakkad district, people stayed awake through the night after his body was brought here on Monday evening.
Hundreds of people made a bee line to his ancestral home to have one last glimpse of the brave warrior who laid down his life defending his country.
Chief Minister Oommen Chandy on late Monday arrived at the Elumbulsherry village and paid homage to the departed soldier.
Niranjan's father Sivarajan, a retired employee, was calm. He said: "I am proud of my son as he has laid down his life for the country."
"His stint with the NSG was to get over in another three months and he had planned to celebrate his daughter's second birthday as he could not take part in the first birthday celebrations since he was undergoing training in the US."
On Tuesday morning, the elders and religious leaders conducted the last rites and Niranjan was cremated at his ancestral house.
The Kerala government was represented at the cremation by Home Minister Ramesh Chennithala. The state government also directed that at 11 a.m all the schools in the state should observe a minute's silence in memory of Niranjan.
Various units of the air force, army and Kerala Police also bid a ceremonial farewell to the departed.
Niranjan is survived by his dentist wife Radhika, 18-month-old daughter Vismaya, father Sivarajan, step-mother and brother Shashank.
The Kerala cabinet that meets on Wednesday will decide on how to compensate the family. The Karnataka government has announced a Rs.30 lakh compensation.