Gopal Dass, now 52, wrote a letter to his father from jail in Lahore in 1999, not knowing that he had died 14 years earlier in 1985. Father Bihari Lal's death came shortly after Gopal Dass went missing in 1984, only to land himself in Pakistani prison.
He got a 27-year term, which was likely to end later this year.
Pakistani President Asif Ali Zardari on Sunday remitted the remaining jail term of Gopal Dass, days ahead of a visit to India by Prime Minister Yousuf Raza Gilani to watch the World Cup semifinal featuring the teams of the two countries.
This was done "on humanitarian grounds", the presidential spokesman said.
Gopal Dass' brother Charan Dass told Hindustan Times the former had gone to his maternal uncle's house at Anandpur in Jammu and Kashmir in 1984 and had inadvertently crossed over to Pakistan, where he was arrested and imprisoned.
Charan Dass said his family came to know in the mid-nineties that he was in a Pakistani jail.
Gopal Dass' nephew Madan Lal said they got the good news only when people from the media began visiting their house on Sunday.
This act on the part of the Pakistan President has brought immense joy to the family residing in Bhaini Mian Khan village of Gurdaspur district. It is in the furniture business.
Charan Dass thanked the governments of both India and Pakistan for their efforts that led to his brother's release.