Shah is known for making films such as "Waqt: The Race Against Time", "Namastey London", "Singh Is Kinng", "Force" and "Commando".
"Many of them are making sex comedies, but I am not capable of making a sex comedy. I also feel I am not capable of making a horror film," Shah told IANS.
"India is a country with so many superstitions, so by making horror film, I don't want to add to that," he added.
Shah's "Holiday", directed by R. Murgodoss and featuring Akshay Kumar and Sonakshi Sinha in the lead roles, focuses on terrorism and sleeper cells.
Shah said: "For me, a film has to be sensible. I don't believe in 'no brainers'. I am not against them, but I can't make them. For me, the film has to be entertaining, sensible and intelligent along with the commercial value."