Balan appears as the South Indian actress in the loose biopic The Dirty Picture.
She told Hindustan Times: "I think it was extremely challenging and it's probably my toughest role to date, because on the one hand, is this woman who is absolutely brazen about her sexuality, she is volatile, and on the other, she is child-like.
"So, to be able to maintain that balance and to translate that on screen is the tough part, but I have enjoyed playing Silk because it has been very liberating for me in more ways than one."
Balan added: "She is a lot of fun, she is very brazen and I think her brazenness, her attitude, was the large part of the reason that she went on to become a huge star, and here, may I add before anyone asks me, that this is not based on the life of Silk Smitha. The heroine of The Dirty Picture is a dancing star of the '80s and we all know that Silk Smitha was a huge dancing star of the '80s."
The film's producers have been threatened with legal action by the late actress's family for depicting her life without permission.
Smitha's brother said that Balan portrayed the star in an "obscene" way.