Nazim Rashid was detained by counter-insurgency police Saturday in the northern town of Sopore. He was declared dead early Sunday by police but they gave no reasons for his death.
A police spokesman said a detailed statement would follow.
Rashid`s family alleged that he had been tortured to death.
The death sparked tensions in Sopore, a town about 50 kilometers (30 miles) north of Indian Kashmir`s summer capital Srinagar. The entire town was observing a total strike Sunday called in response to the death.
Kashmir Chief Minister Omar Abdullah promised "swift and exemplary action" in a Twitter post.
"It is a gross human rights violation and inexcusable. Things like this cannot of allowed to happen," he said.
Last year more than 110 people were killed when police and security forces fired at pro-freedom demonstrations triggered by the death of a 17-year old youth by a police teargas shell.
Last week there were protests against the alleged rape of a woman by soldiers.
Wary of new unrest, police have set up a special team to investigate the alleged rape while the army has also launched its own probe.
The protests were the first major demonstrations this summer and raised concerns that the region might see a return to the street violence that has rocked the state over the last three years, leaving scores dead.
Kashmir is split between India and Pakistan, with the Indian-administered sector hit by a more than two-decade insurgency against New Delhi`s rule that has left more than 47,000 people dead. (M014/K004)