The soldier was captured by Pakistan Rangers and was tortured for four months being handed over to India.
Soldier Chandu Chavan, who inadvertently crossed into Pakistan in 2016, has said he is quitting the Army due to incessant "harassment" in the force.
"Since I came back from Pakistan, I have been continuously harassed in the Army and am being looked at with suspicion, that is why I decided to quit," he said.
Chandu Chavan has sent his resignation letter to his unit commander in Ahmednagar, sources close to him have said.
He was captured by Pakistan Rangers and for four months, was beaten, tortured and almost killed before being handed over to India.
Last month, he met with an accident and remained admitted in a hospital with deep injuries to his face and skull. Chandu Chavan broke four teeth and he also sustained abrasion below his eyebrow and left chin, as well as his upper lip.
The accident took place when he was riding his two-wheeler without a helmet which bumped a pothole near his home town Bohrivir in Dhule district of Maharashtra.