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Verinag is named after Nila Nag, the son of the wise saint, Kashyap Rishi, who reclaimed the Kashmir valley, the original shape of this spring was in the circular form of a kund. In 1620, the Emperor Jahangir had the shape changed into the traditional Mughal octagonal. The spring, which has a circumference of 80m in enclosed today by a brick wall under which are vaults. These lake – like waters have a limpid clarity in which the verdant surroundings of pine trees are mirrored.

This place is so called after the name of a spring there called Verinág. The spring itself is named after the earlier name of a nearby town called Shahabad. Shahabad was earlier known by the name of Vér and also nag is local name for a spring. From this earlier name, this spring came to be known as Vernág which now has transformed to Verinag.[4] Both the names, Verinag and Vernag, are used interchangeably.

Verinag spring which is in Verinag town, issues from a high scarp of a mountain spur, and is considered the source of the Jhelum river. It is situated at the bottom of a hill covered by pine trees and evergreen plants. Verinag spring was originally an irregular and shapeless pond, and water, oozing out from different places in it and spread about and formed a little marsh. Emperor Jahangir, whose artistic taste for polishing the beauty of nature is well known, saw this and at once determined to improve it. He built the octagonal tank of sculptured stones round it, so that all water was collected therein, for which carvers were brought from Iran.

A garden was also built by Jahangir next to this natural spring which is of pre-Islamic religious significance. The construction date of the octagonal tank and the garden is 1029 Hijri or 1620 A.D, during the 15th year of the Jahangir's reign, which is duly inscribed on a stone slab built into the southern wall of the spring. Seven years later, Jahangir's son Shah Jahan, who was no less a lover of natural beauty, constructed cascades and aqueducts in straight lines through and around the fine garden which he, in order to enhance further the beauty of the place laid out in front of the spring. He also built hot and cold baths to the east of this garden, just outside it, of which little trace is now left.

The water contained in an octagonal spring has crystal blue water in which a variety of big fishes live. History and the carvings on stones in Persian on the walls surrounding the spring tell about how this great source of underwater spring is contained without revealing its architecture.The water is collected in a pool surrounded by arched recesses, and then flows down a 300-yard canal to the Bihat river. Jahangir wished to be buried at Verinag gardens, but his wife, Nur Jahan, disobeyed his wishes. Today nothing remains of the pavilions which once decorated the area.

Fish swim in the cool depths and this picturesque setting that so captivated the Mughal emperors has lost none of its pastoral charm over the centuries. The lawns around the spring are a beautifully manicured green, and banks of massed flowers add splashes of colour to this symphony of greens and browns.