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Due to the diverse reasons, people have been migrating from one place to another since centuries. Kashmir conflict is one of the world's unsettled conflicts, which has negative implications on regional security and stability, with no termination in sight for the tumult. Since the beginning of uprising in 1988, the Jammu & Kashmir region has been the spot of dreadful violence, death and displacement. Due to the unrest, thousands of refugees have crossed over to Azad Jammu & Kashmir (AJ&K, shortly AK)and encountered a number of tangible and intangible challenges; however, the AK Government has given certain incentives to these refugees. On the other hand, the Government of Jammu & Kashmir (J&K, also known as Indian Occupied Kashmir) has introduced Surrender and Rehabilitation Policy in November 2010 to facilitate the return of these refugees, yet, due to certain reasons, the policy has remained unsuccessful in achieving its goal. Though refugees have been entering into the social fabrics of the local communities through intermarriages and socio-economic ventures since 1989, yet the Government is still indecisive about their future settlement. This study is focused on the issues and challenges to the refugees, Government response and the possible solution regarding their future settlement. [ABSTRACT FROM AUTHOR]