The victim was inside his house when suspected militants fired at him. Preliminary reports suggest the sarpanch belonged to ruling National Conference.
No militant group has claimed responsibility for the attack so far.
This is second such killing of grassroots representatives in north Kashmir this year. At least five grassroots representatives have been killed since panchayat polls held in 2011 after a gap of 30 years.
After mass resignations from panches and sarpanches earlier this year, chief minister Omar Abdullah had directed security agencies to increase presence in areas where there's threat perception.
Though he had expressed helplessness in providing security to each elected representative, whose number is around 34,000, the chief minister had asked security agencies to identify those who face threat from militants or hail from areas where there is high threat perception.