Lal was born in Ghazni. His father, Diwan Chajju Mal (1600-1652) was a disciple of the 8th Sikh Guru Har Krishan. Chajju Mal was chief secretary (Diwan) of Dara Shikoh, the eldest son of Shah Jahan. Chajju Mal went with Shikoh during his conquest of Afghanistan. Dara Shikoh returned to India while Chajju Mal stayed in Ghazni, Afghanistan, where Bhai Nand Lal was born.
At age 12, Lal started writing Persian poetry with the Takallus of Goya. He learned Sanskrit, Hindi, Arabic, and Persian from his father. Lal was also a scholar of Islamic studies, even though he never took the Shahada.
His mother Dharga Mal, an Amrithdari Sikh, died when he was 17. At the age of 19, his father died. In 1652, Lal settled in Multan, West Punjab, where he married.[2] Lal later became a courtier in the darbar court of Guru Gobind Singh; the tenth Sikh Guru. He was one of the fifty-two poets of the court.