The “Kashmir Seismic Gap” is located between the epicentral regions of the 1905 Kangra and the 2005 Kashmir earthquakes. The area corresponds to the Jhelum basin and encompasses the Kashmir Valley. The geodetic measurements indicate that the Kashmir Himalaya accommodates ∼12 mm/yr of India-Asia convergence and ∼5 mm/yr of dextral shear. However, except for the known Karakoram Fault, which is further north of the area under investigation, there are no convincing reports of any prominent dextral faulting from the region. In this article, we have carried out remote sensing and GIS based geomorphic investigation including topographic derivatives such as drainage geometry, basin divide offsets, and elevation-χ analysis that consistently indicate an active accommodation of the missing dextral shear. The dextral slip is manifested in the deformed (offset) lateral divides of the Kashmir Valley (KV) and preferential deflection of the drainage along the Central Kashmir Fault (CKF). The χ-metric, which is used to examine the divide stability, also shows a change in its nature corresponding to the Central Kashmir Fault. The drainage on the SE lateral divide displays the most conspicuous evidence of the dextral shearing, which has resulted in the capture of through-going drainage within Kashmir Valley, and the beheaded stream continues to flow southwards. This event of drainage reorganisation has left a ‘wind-gap’ in the divide near Banihal. Furthermore, the hypothesis of dextral shearing is tested in the larger tectonic context together with the ∼ N-S oriented Jhelum Fault (JF) and Kishtwar Fault (KF). Both the Jhelum Fault and Kishtwar Fault are active sinistral faults and can impart anti-clockwise rotation to the region in between. The rotation between blocks of the Kashmir Himalaya can induce the observed dextral shear, which is consistent across the entire Kashmir Himalaya and the Kashmir Valley. Both of which, when calculated with the ∼ 4–6 Ma age of the Kashmir Valley, imply ∼ 5–7 mm/yr of dextral shear, similar to the estimates from geodesy.