As many 94 civilian protesters lost their lives in clashes with forces during the unrest and violence triggered by his killing last July.
They also surrounded the hometown of Burhan Wani, 22, who was killed fighting Indian troops previous year.
Wani's killing set off months of protests and deadly clashes across the region, during which at least 90 people were killed and thousands injured.
In occupied Kashmir, complete shutdown is being observed on Saturday to commemorate the first martyrdom anniversary of popular youth freedom fighter, Burhan Muzaffar Wani.
Protestors clashed with security personnel in Tral, the hometown of militant commander Burhan Wani, on his first death anniversary. They were thwarted back by police and paramilitaries by use of tear smoke shells and firing pellets.
"There were so many soldiers outside I couldn't go out".
In parts of south Kashmir, the epicenter of protests, villagers began intervening in raids on suspects, throwing stones at government forces to create a distraction and give the rebels a chance to flee. However, people, mostly women stopped the forces from entering the mosque. Army spokesman Lt. Col. Manish Mehta called it an "unprovoked" violation of the 2003 cease-fire between India and Pakistan.
The leadership said that try as they may this approach of the state is flawed and will never succeed in pushing people away from striving for the fulfillment of their political aspirations. It said it had lodged an official protest with the Indian envoy.
Indian security forces have in recent years dealt a series of blows against dozens of militant groups fighting for independence or a merger of the Himalayan territory with Pakistan.
Kashmir has been divided between India and Pakistan but claimed in full by both since the two partitioned and gained independence from Britain in 1947. A senior leader of a national party said that terrorists in Kulgam, Redwani, Khuwani, Quimoh, Hawara and Haji Dumhalpora mobilize young boys from poor families to join Hizbul. "The year gone by has seen the emergence of "home-grown insurgency" in Kashmir particularly in South Kashmir".
He said hearts of Pakistanis and Kashmiris beat together and the former would not leave Kashmiris in this hour of trials and tribulations.
Shops and business establishments remained closed while vehicles remained off the roads, the official said, adding that the situation was peaceful so far.
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