The Kundal Shahi language belongs to the North-Western group of the Indo-Aryan languages; it is closely related to Shina and spoken as a native language by some 700 people in the predominantly Hindko-speaking village of Kundal Shahi in the Neelum Valley of Azad Kashmir. Nearly all people whose ancestral language is Kundal Shahi or who still speak the language live in the village of Kundal Shahi.

Kundal Shahi is the only language in the Neelum Valley which is exclusive to this valley. The ancestors of the community migrated from the valley of Kashmir some three centuries ago and settled at the present place.

Since Hindko is the lingua franca of the Neelum Valley, all Kundal Shahi speakers also speak Hindko. The dominance of Hindko is now resulting in a language shift among the Kundal Shahi community. Moreover, exchange of firing and shelling across the Line of Control (LoC) from 1990-2003 between the Pakistani and Indian forces and the devastating Earthquake of 8 October 2005 has aggravated the situation and has accelerated language shift, resulting in a status of Severely Endangered for the Kundal Shahi language.