Inayat was born in Baroda, a city in Gujerat Presidency, on Wednesday the 5th of July at 11:35 p.m. in 1882 in the house of Maula Bakhsh.

The aunt of this infant child, Inayat Bibi, always held the ideal that the world should become a better and higher place. She had suffered for this ideal and was dying for its sake. On her deathbed she was told of the birth of a child in her home and she said: "He is born with the ideal for which I am dying and my only satisfaction in the hour of my death will be that this child should be called by my name, Inayat", which means Benignity.

One evening Inayat's father brought him home some sweets, but finding the child asleep, put them aside till morning. During the night Inayat had a vision in which he saw exactly what his father had done. As soon as he awoke, the child called out for the sweets, but his mother, not knowing what the father had done, said there were none.

Inayat persisted till at last his mother asked him: "Where?" "Over there," he replied, pointing with his hand. His mother went, thinking to pacify the child, but to her great surprise found he was right, there were some sweets where he had said. On inquiry she learned what had occurred. "But," said his father, "Inayat did not know, for he was fast asleep."