Gulati is the daughter of Dr K.A. Gulati who arrived in Oldham from Bombay, India in 1960. She has a younger brother, Rajesh, and two older sisters, Sushma and Hema.

Gulati married the Architect Anshu Srivastava in a Hindu ceremony on 10 November 1990 but the couple divorced in May 1994. She lived separately from her husband and became pregnant with Akshay. From 1999 to 2003 she was in a relationship with ex-Emmerdale actor Gary Turner.

One of Gulati's earliest appearances was as a Dancer in the video for Boy George's 1991 single "Bow Down Mister." In the late 1990s, she appeared in both series' of Victoria Wood's BBC sitcom Dinnerladies. She appeared as Ameena Badawi from October to December 2000, in EastEnders. She is one of few to have appeared in both EastEnders and Coronation Street. Gulati appeared as her main character, Sunita, in East Street, the crossover between both soaps in 2010, as part of Children in Need's telethon. In 2001, she appeared in the short film Shadowscan, directed by Tinge Krishnan, which won a Bafta Award; and, in 2004, Gulati was nominated for a Manchester Evening News theatre award for her work in the play Dancing Within Walls, which was staged at the Contact Theatre in Manchester.

Gulati is also one of very few actors to have appeared on both Coronation Street and its rival series EastEnders in 2000.

Gulati was called in to join a murder hunt in December 2004 following the murder of Shafilea Ahmed. At a press conference appealing for more information about the teenager's death, Gulati read out some of the poems found in her bedroom by police during their investigations which "were a testimony to her sadness at being caught in a culture clash with other members of her family".

In October 2006, Gulati appeared at the Royal Albert Hall as part of a short skit featured in The Secret Policeman's Ball. In the Sketch, Gulati and co-star Nitin Ganatra play a holidaying couple who are under the mistaken belief Guantanamo Bay is a holiday resort. The Sketch also starred American actors Chevy Chase and Seth Green.

Gulati has recently been seen as one of many storytellers in the CBBC revival of Jackanory and in the UK tour of the hit play Girls Night by Louise Roche. She also appeared on the Channel 4 special Empire's Children, tracing her family's history during the partition of India. In summer 2007, she appeared in Pretend You Have Big Buildings at the Royal Exchange Theatre in Manchester.

In 2008, Gulati made her debut as a filmmaker, producing the short film Akshay for the motiroti's 60x60 Secs. This was shortlisted for the Satyajit Ray, short film awards. During this same period, the Actress returned to her Coronation Street role as Sunita Alahan, where she stayed for three years.

On 11 June 2009, Gulati appeared in the BBC1 programme Celebrity MasterChef. She did the first stage tour of Dinnerladies in early 2009 and she has appeared as a guest story Teller for (cbbc, Bedtime Stories). In November 2010, Gulati was a guest panellist on ITVs flagship show Loose Women, to celebrate fifty years of Coronation Street and in April 2012, to celebrate soap week and in June 2011, Gulati was a guest on Countdown. Upon announcing her departure from Coronation Street, the Actress expressed her Desire to write and perform more comedy than her soap-opera career permitted her time to do. In 2016, she appeared in the ITV/Netflix series Paranoid. Gulati made a guest appearance on Casualty on 29 October 2016.

Gulati made her Loose Women debut on 18 November 2010 to celebrate 50 years of Coronation Street, appearing alongside regulars Kate Thornton, Sherrie Hewson and Carol McGiffin. Gulati returned to the show on 11 April 2012 appearing alongside regulars Andrea McLean, Jane McDonald and Janet Street-Porter during soap week. Gulati returned to the show as a regular from 13 March 2013, taking over from Sally Lindsay who took time off to film Mount Pleasant, from September 2013, Gulati became an occasional panellist on the show, before leaving on 30 May 2014.

In 2017, she appeared as Saba in the British romantic comedy film Finding Fatimah. Also in 2017, she joined the cast of River City where she currently plays Farah Khurana.