Often referred to as the 'Swarg Ki Vatika' or the garden of heaven, this beautiful palace is said to have inspired the Taj Mahal. Built on the Jag Mandir Island, about 800 m south of Jagniwas, this three-storeyed palace was built by Maharana Karan Singh II in 1620 and later completed by his son. Built in yellow sandstone and marble, it is said the king built it as a hiding place for Mughal emperor Shah Jahan, before he ascended the throne. Legends say, Shah Jahan, who was then known as Prince Khurram lived here with his wife and sons. Maybe a reason why Gul Mahal, the section in which the prince lived, has strong traces of Islamic architecture, including the crescent. A mosque was also constructed here. Gu Mahal has a stunning courtyard with checquered black and white tiles. Folklore says, the Mughal prince was so impressed with the architecture of the palace, especially its pietra dura (stone mosaic) work, that when he used it in Taj Mahal in Agra.

The other attractions here are the life-sized marble elephants, Bara Patharon ka Mahal, Kunwar Pada ka Mahal, Zenana Mahal and beautiful flower gardens. It also has a museum that offers a glimpse into the history of this island and the palace. Interestingly, most locals also refer to it as Octopussy's house, referring to the 1983 James Bond film Octopussy, which was shot at several palaces in Udaipur.