The cheque for Rs 75 lakh was from the Army Group Insurance Fund, apart from another cheque for Rs 1 lakh from the martyr's regiment, Rajputana Rifles.
"Major General B.S. Raju, the General Officer Commanding of the Victor Force, visited the bereaved family members in Kulgam district and assured them that the Army stands by them and will always be ready to help", Defence Ministry Spokesman Colonel Rajesh Kalia told IANS here.
"The GOC assured the family that those responsible for Lt Ummer's dastardly murder will be brought to justice. The GOC announced renaming of an Army school in the area as 'Lt Ummer Fayaz Goodwill School'," he added.
The 22-year-old Kashmiri soldier was off-duty and unarmed when he was dragged out of the home of his relatives in Kulgam in south Kashmir by masked gunmen. He had gone to his family village to attend the wedding of his cousin. He was shot multiple times.
His bullet-riddled body was found on Wednesday morning at Harmen in Shopian district.
Javid Gilani, who heads the police in the Kashmir Province, also said that the 22-year-old officer, a Kashmiri, was killed by a rifle that was looted from a policeman in a recent attack on a court complex in Shopian. Empty cartridges of an INSAS rifle were found near his body.
The officer, from Rajputana Rifles, had joined the Army in December last year.
Police has since issued posters of three men responsible for the officer's kidnapping and subsequent murder.