"The Padma Bhushan is a grand honour and our family is really excited after hearing the news because dad totally deserves it," Ahana told over phone from Mumbai.
"However, I also want to say that it was a bit too late to remember him for the award as he is not only a nice actor, but also a great human being," added the 26-year-old.
The family has plans to raise a toast to the achievement Wednesday.
"I am happy for him and we are definitely going to plan a family dinner tonight to celebrate the achievement," said Ahana, who was born to Dharmendra and actress Hema Malini, and is their second daughter, after Esha.
A young designer, she says her father is extremely generous and loving.
"He is one person in our family, who is always ready to help the needy people in whichever way possible, and this is what makes him a true gentleman," she said.
Dharmendra, 76, is popular for films like "Bandini", "Satyakam", "Sholay", "Chupke Chupke" and "Seeta Aur Geeta". In recent times, he has been seen in movies like "Yamla Pagla Deewana" and "Tell Me O Kkhuda".
He has been chosen to receive the Padma Bhushan, along with actress Shabana Azmi and filmmaker Mira Nair in the art-cinema category. The announcement was made on the eve of Republic Day Wednesday.
Ahana says she loves watching her dad's performance especially in "Sholay" and "Seeta aur Geeta", and says his charm is evergreen.
"Dad is best and he will always be. I still can't forget the way he flirted with mom in 'Seeta aur Geeta'," she said.