The protests erupted after Spain's Deputy Prime Minister Carmen Calvo in an interview with La Vanguarida published on Sunday stated that the government is "close" to deciding on the pardons.
The annulled vote of independence for Catalonia, which took place in October 2017, is still an infected political issue that divides the country.
According to an opinion poll published on Sunday, 63 percent of Spaniards are against giving amnesty to the former leaders while 25 percent are in favor and 6 percent are neutral.
"We must stop this now, to be pardoned you must show remorse and the separatists have not done so," businessman Carlos Bandecha, who is taking part in the protests in Madrid, told Reuters.
Perennial prison sentences
According to the Madrid police, as many as 126,000 people are taking part in the protests.
However, the country's national police authority states that the figure is 25,000.
Large parts of the political opposition share the dissatisfaction with the government's plans, and among Sunday's protesters are both the conservative Partido Popular, the far-right Vox and the center-right Ciudadanos.
The twelve Catalan leaders who may be pardoned were sentenced by Spain's Supreme Court in October 2019. Nine of them were jailed for between nine and thirteen years.
Another three were found guilty, but escaped imprisonment.