The noted director, best known for the dark comedy "Jaane Bhi Do Yaaro", died of a heart attack at his Mumbai home this morning.
"Anguished by the passing away of Shri Kundan Shah. He will be remembered for his wonderful usage of humour and satire to showcase the life & struggles of common citizens," Modi tweeted.
"My thoughts are with his family & admirers. May his soul rest in peace," the prime minister added.