The Bhagwan Valmiki Tirath Sthal situated at Amritsar is believed to be the Ashram site of Maharishi Valmiki, the writer of Ramayana.[8][9] As per the Ramayana, Sita gave birth to Lava and Kusha, sons of lord Rama at Ramtirth ashram. Large number of people visit Ramtirth Temple at annual fair. Nearby cities to Amritsar, Lahore and Kasur were said to be founded by Lava and Kusha, respectively. During Ashvamedha Yagna by Lord Rama, Lava and Kush caught the ritual horse and tied Lord Hanuman to a tree near to today’s Durgiana Temple.

Guru Ram Das, the fourth Sikh guru is credited with founding the holy city of Amritsar in the Sikh tradition.[10][11] Two versions of stories exist regarding the land where Ram Das settled. In one based on a Gazetteer record, the land was purchased with Sikh donations, for 700 rupees from the owners of the village of Tung.[12]

According to the historical Sikh records, the site was chosen by Guru Amar Das and called Guru Da Chakk, after he had asked Ram Das to find land to start a new town with a man-made pool as its central point.[13][14] After his coronation in 1574, and the hostile opposition he faced from the sons of Amar Das,[15] Ram Das founded the town named after him as “Ramdaspur”. He started by completing the pool, and building his new official Guru centre and home next to it. He invited merchants and artisans from other parts of India to settle into the new town with him.