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7-level AC-AC Sparse modular multilevel converter (SMMC) is proposed in this paper. It is a bi-directional multilevel converter and it is employed in high power and high voltage applications. It contains full bridge and half bridge SM's on the middle arm, and low frequency converters on each side of the converter. In this converter more number of IGBT switches can work under soft switching mode. Control scheme is also proposed in this paper, it is utilized to obtain the capacitor voltage balancing. Capacitor voltages have some oscillations, harmonics will be decreased by applying modified PWM technique. Number of levels of the converter increases, voltage harmonics will be decreased and also switching frequency of the full bridge and half bridge arm IGBTs is decrease. The appropriateness of the 7-level AC/AC SMMC with Control scheme will be estimated by utilizing the MATLAB/SIMULINK software. Index Terms-7-level AC/AC SMMC, Control design, Capacitor voltage balancing, Modified PWM technique. M. Anka Rao received M.Tech degree in power and industrial drives from JNTU College of engineering and technology, Anantapur in the year 2010. He is currently working as an Assistant professor in electrical and electronics department in JNTU College of engineering & technology, Anantapur. He awarded a B.Tech degree in Electrical and Electronics Engineering from Andhra University in the year 2006. He is currently working towards the Ph.D degree in power and industrial drives at JNTU college of Engineering & technology, Anantapur. R. Mayuri received B.Tech degree in Electrical and Electronics Engineering from Rajeev Gandhi Memorial College of Engineering and Technology, Nandyala in the year 2016. She is currently working towards the M.Tech degree in Power and Industrial Drives in JNTU College of Engineering & Technology, Ananatapur.