Friends and family paid their respects to Jacintha Saldanha, 46, during a simple ceremony in Shirva, some 30 miles north of Mangalore on the south-west coast.
Earlier, crowds lined the roads close to the Catholic church to pay their respects while relatives attended a private prayer ceremony at her home.
Ms Saldanha, a mother-of-two, was found hanging in her nurses' quarters at London's King Edward VII's Hospital by a colleague and a security guard on December 7.
Three days earlier she transferred a call from two Australian DJs, believing they were the Queen and Prince of Wales, to a colleague who described in detail the Duchess's condition during her hospital stay.
Her children, Junal, 16, and Lisha, 14, have described the "unfillable void" left in their lives by their mother's death.
During a mass at Westminster Cathedral on Saturday, her husband Benedict Barboza fought back tears as he paid an emotional tribute to his wife, telling mourners: "I feel a part of me has been ripped out."
Today he accompanied a casket carrying her body into Our Lady of Health Church at around 4pm local time, after journeying back to the family's home-town for the funeral.
Authorities in India are understood to have made extensive arrangements - upping security and setting up barricades - to accommodate crowds of mourners touched by Ms Saldanha's death.
Jesuit priest Fr Richard Rego, who has worked in the region for more than a decade, said the close-knit town had been left in shock.
"The local community were jolted," he said. "They are now coming together to support the family."
Mr Barboza is understood to be spending Christmas with his family in Shirva as he comes to terms with his wife's death.
Standing outside the cathedral last week, he said the family "could not have foreseen the unprecedented tragedy that has unfolded in our lives" and thanked the Duke and Duchess of Cambridge and Prime Minister David Cameron for their condolences.
"The events of the last week have shattered our lives," he said. "We barely have the strength to withstand the grief and sorrow."
Ms Saldanha left two notes in her room and had marks on her wrist when her body was discovered, Westminster Coroner's Court in London heard on Thursday.
John Lofthouse, chief executive at King Edward VII's hospital, said the nurse was reassured on a number of occasions by senior management following the hoax call.
But she was found dead soon after.
Memorial services have been held at the hospital and in Bristol where her husband and children live.
The DJs behind the call - Mel Greig and Michael Christian - have also spoken of their grief following her death.
Interviewed on Australian TV networks, the presenters said their prank call to the hospital prompted "a tragic turn of events no-one could have predicted or expected".
Southern Cross Austereo (SCA), the parent company of 2Day FM, has ended the pair's Hot 30 show and suspended prank calls across the company.
Earlier, relatives carried the coffin through the cemetery before Mr Barboza, flanked by his two children, watched as it was lowered into the ground.
He held them both in a tight embrace as Lisha broke down in tears.