Rumours gained traction when a 'RIP Kader Khan' Facebook page was made, after which many took to micro-blogging site Twitter to pass on their condolences.
However, there was a debate online as some believed the reports to be frivolous.
" Kader Khan the legendary Bollywood actor, comedian, script and dialogue writer and director passed away today. May his soul rest in peace!," posted one user and there were several other tweets in the same vein.
But the air was cleared sooner rather than later.
Balaji Motion Pictures CEO Tanuj Garg said, " Kader Khan is fine. Why then are people bombarding my inbox with bad news?"
Another user tweeted, "Twitter & Facebook should be screened to stop hoax, pranks and rumors. Lamers here just killed a healthy legend. # Kader Khan is alive."
The 77-year-old multi-talented artist has been an essential part of numerous Hindi films, writing dialogues for blockbusters like 'Sharaabi', 'Coolie' and acting in 'Aankhen' and 'Hero No 1'.