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Assigned male, and born in Thane, Maharashtra, Laxmi is a member of the Brahmin, the highest echelon of India's caste system. She was thus relatively privileged, earning a post-graduate degree in traditional dance, and working as a professional dancer and choreographer. In primary school, she reached out to the gay journalist Ashok Row Kavi, who became a mentor to her. A few years later, when Kavi campaigned for the decriminalization of homosexuality in India via the repeal of its 'Section 377', she came out as a transgender woman at a television press conference in support of the campaign. Upon finding out, her parents attempted to arrange heterosexual marriages for her at the time - however, years later, her father commented to the BBC: “if my child was handicapped would you even ask me whether I’d have asked him to leave home? And just because his sexual orientation is different?”

Laxmi came to self-identify as 'hijra'. A transnational umbrella term, the hijra in India call themselves 'Kinnar'. They derive the name from mythological muses, and in turn, the Kinnar community are ascribed the ability to confer blessings. Though 'hijra' is taken to be synonymous with 'transgender' in Pakistan, in India the concept also includes a subset of 'third-gender', non-binary individuals, amongst others. Nevertheless, the Indian Kinnar community is a coherent monastic tradition that is spiritually contextualized by a shared queer identity. This monastic tradition draws from several mentions of non-binary entities across Hindu holy texts, including a story from the Mahabharata on the masculine God Krishna's transformation into the woman Mohini to marry the man Aravan, and more explicitly, a story from the Ramayana in which the God Rama is impressed by a community of hijra who, interpreting his order given to all the men and women in his camp to disperse as not referring to them, settle at the camp for 14 years until his return.

Laxmi began her activism as a bar dancer, organizing other dancers to protest a state government order to shut down dance bars. Though she was unsuccessful, she maintained her activism for the Kinnar community. The pinnacle of that activism was her status as a petitioner in a Supreme Court of India case, National Legal Services Authority v. Union of India in 2012. The case proved to be ground-breaking; the court found that the class of transgender persons is entitled to legal protections against discrimination, and recognized a legal 'third-gender' in India. As the highest court in a common-law jurisdiction, their decision is crucial in setting a standard of legal recognition in India, but was even cited internationally, in Malaysia's Muhamad Juzaili Bin Mohd Khamis v. State Government of Negeri Sembilan. Domestically, it was cited in a later case, Navtej Singh Johar v. Union of India, in which 'Section 377' was finally found unconstitutional.

Her position in the Kinnar community has advanced throughout her life; today, she is a 'Mahamandaleshwar' of a Kinnar Akhada (a monastic cloister), meaning their highest spiritual authority. The culmination of that advancement was at the 2019 Kumbh Mela, India's most significant pilgrimage, held cyclically with 6-year peaks. Attending with her Akhada, they were permitted to bathe in the intersection between the Ganges and Yamuna rivers on the festival's first day, a deeply spiritual ritual for priestly representatives of the country's major monasteries. She continues to practice her monastic tradition, but has also pursued a marital engagement of her own choosing - her partner, a trans man by the name of Aryan Pasha, is a bodybuilder and social media influencer.