Showkat Ali, son of Barkat Ali resident of Pind Sail Jathan in Sialkot, was found hanging inside the Amphalla district jail in Jammu and Kashmir winter capital Jammu Saturday.
A magisterial probe has been ordered into the incident. Police has also registered an FIR on the incident.
Prison sources said a preliminary inquiry indicated the prisoner had committed suicide.
Showkat was arrested in February 2011 in Jammu after he crossed over to the Indian side of the international border.
Reports said Showkat had been suffering from a mental ailment.
"After completing of all the formalities, the body of the prisoner was sent at 5.50 a.m. today to Wagah border (Punjab) for return to his native village.
"The body will be handed over to Pakistani authorities at Wagah border today (Monday)," a senior state government official told IANS here.