The actor, aged 79, breathed his last at the Kokilaben Dhirubhai Ambani Hospital here at 5.20pm.
Director Shyam Bengal described him as "god's good man" and a beautiful human being.
"He was god's good man and a beautiful human being beyond anything else," Benegal, who worked with the late actor in "Kalyug" and "Junoon", told PTI.
"I just received the news that Shashi Kapoor ji has passed away. I am really saddened. He was a good human being. My heartfelt condolences," she posted on Twitter.
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Actor Aamir paid his respects to the actor, saying he was not just a "great star and a passionate filmmaker", but also a "wonderful human being".
"His work has always given Indian audiences great joy. His contribution to Indian theatre was huge, Prithvi theatre is the favourite venue of both performers and audiences alike. His passing a sad day for all of us. My condolences to Sanjana, Kunal, Karan and everyone in the family. May his soul rest in piece," Aamir wrote on Twitter.
"Am deeply saddened by the passing away of my co-star Shashi Kapoor. The last of that generation of Kapoors gone. A gentleman and friend gone. An era gone... All that remains are his films and precious memories," she tweeted.
Veteran actor and his co-star in several films, Shabana Azmi, posted on Twitter a black-and-white picture of the actor, with the caption, "We will miss you ...".
Noted film critic Aseem Chhabra, who penned the authorised biography on Shashi, "Shashi Kapoor: The Householder, the Star", tweeted, "I am heartbroken! It was expected but the loss of #ShashiKapoor has left me feeling very low, very empty."
"I remember him as a bubbly person. He was full of fun, full of jokes and at the same time he was really a smart person," Banu, legendary actor Dilip Kumar's wife, told PTI.
Veteran actor Moushumi Chatterjee remembered him as a great actor and jovial person.
"He was a gem of a person, a very nice human being. He was a very protective person. He was a very talented hero. I learnt a lot of things from him in the beginning of my career," she told PTI.
Leading Bollywood actor Akshay Kumar recalled the late actor's classic line from "Deewar" and said it inspired aspiring artistes.
Filmmaker Mahesh Bhatt said Shashi Kapoor revolutionised Indian theatre.
"Shashi ji also contributed to the theatre movement hugely. Prithvi Theatre is like a 'shrine'... His contribution to the alternate cinema movement is also huge," he wrote.
Director Hansal Mehta tweeted, "RIP Shashi Kapoor. The charming man, the brave producer, the lovely actor, my neighbour is no more."
Actor Ajay Devgn wrote, "You won't be forgotten. Rest in peace #ShashiKapoor ji." While Sanjay Dutt said the veteran actor would never be forgotten by his fans.
Actor-writer Vinay Pathak posted one of the late star's photographs on social media and described him as his personal "Prithvi Theatre genie".
"Nothing but diligence beauty and innocence... He was my Prithvi Theatre Genie! The stage is silent Truly a sad day!" he posted.
Actor Boman Irani tweeted, "Handsome is that handsome does ... He was. He did. He lives on."
Filmmaker Subhash Ghai said working with Shashi Kapoor was a learning experience for him.
"I worked with him in two movies. 'Gautam Govinda' and 'Krodhi' in late '70s. And learnt a lot from him like work ethics, discipline, time planning, compassion and above all his love and passion for good cinema and theatre development," Ghai tweeted.
"Saddest day of my life... The man to whom I owe my entire career. I am grateful to him for all my professional achievements, for giving me my first and the biggest break as a lead in 'Utsav' opposite Rekha... I'm heartbroken," Suman said in a statement.
A host of artistes paid homage to the late actor at his residence today. Among them were the Bachchans -- Amitabh, Aishwarya and Abhishek -- Rani Mukerji, Kajol, Kareena Kapoor, Saif Ali Khan, Boney Kapoor and Karisma Kapoor.