The alleged "fake encounters" have sparked outrage and protests in the Muslim-majority region, where Indian forces are often accused of abusing and killing civilians.
The authorities say dozens of troops have faced demotions, suspensions and other penalties for alleged abuses.
The army also said in 2000 it would court martial five soldiers accused of killing five civilians in an allegedly fake gun battle after refusing to allow a civilian court to try the men.
But it has never said whether the soldiers actually faced a court martial, and no soldier has ever been convicted.
The seven officers were charged with fatally shooting carpenter Abdur Rahman Paddar, 35, who disappeared from Srinagar, the region's main city, on December 8 last year.
The formal charges have renewed calls from relatives demanding to know the whereabouts of their loved ones.
Relatives of those reported missing have been organising sit-in protests, and displaying the photographs of their missing husbands, sons and brothers.
Police said Paddar was Abu Hafiz of Pakistan and purportedly a member of Lashkar-e-Tayyaba, one of the main armed groups fighting in Kashmir.
The authorities exhumed Paddar's body and used DNA tests to confirm his identity, casting doubt on the official account of his death.
Since then, at least four other bodies of civilians believed to have been killed in similar circumstances have been exhumed.
The results of those investigations are still pending.
The accused had been charged with criminal conspiracy, abduction, murder and destruction of evidence, Farooq Ahmed Dar, the police officer heading the investigation, said.
Human rights groups say probes into allegations of custodial deaths rarely yield any concrete results and are often aimed at calming public anger.
Kashmir is divided between India and Pakistan, but claimed by both, and the two countries have fought two wars over the territory since independence from Britain in 1947.
India accuses Pakistan of providing material and training to the Islamic fighters who have been fighting to see Kashmir independent or have the part controlled by overwhelmingly Hindu India merged with Muslim Pakistan.