Prime Minister Narendra Modi led tributes to the star, who was born in northern India in April 1912, describing her on Twitter as “prolific and full of life”.
“Zohra Sehgal made a mark through her acting, which is admired across generations. Saddened on her demise,” he wrote.
Sehgal’s daughter Kiran told the Press that her mother had been ill for a few days and died of a cardiac arrest in New Delhi in the afternoon.
Sehgal began work as a dancer in the 1930s before moving to acting, becoming known as the doyenne of Indian theatre, although she also won fans through her various roles in Hindi and English-language films and TV series over the years.
But her fortunes turned when she landed significant roles in British productions such as the landmark 1980s series “The Jewel in the Crown”, and the film “My Beautiful Laundrette”.
Sehgal returned to India in the 1990s at the age of 80 and continued acting until the age of 95.
Her most popular Hindi hits included “Dil Se” and “Hum Dil De Chuke Sanam”. In 2010 she was awarded the Padma Vibhushan, India’s second highest civilian award.
Her last film role came in 2007 in “Cheeni Kum” in which she acted alongside Bollywood superstar Amitabh Bachchan as his mother.
What a journey and what an immensely loveable co-star, Prayers for her blessed soul” Bachchan wrote on Twitter on Thursday.
Stars Shah Rukh Khan and Priyanka Chopra were among others who paid tribute.