Ananda Rao was born on 15 May 1852 at Padma Vilas, Trivandrum Fort, to Sir T. Madhava Rao, a prominent Indian statesman who was known for his work as the Diwan of Travancore and of Baroda and as one of the early pioneers of the Indian National Congress.

Rao was initially employed as a tutor to Maharaja Tukajirao Holkar III before joining as an attache to the Mysore Commission on 14 November 1873.

Rao was appointed Assistant Commissioner of Bangalore on 7 July 1876 and was in charge of Mysore Palace accounts from 1 December 1879 to January 1883.

He served as the Chief Secretary to Dewan Sir K. Seshadri Iyer from 1889 to 1897 and Director of Agricultural and Other Statistics from 1897 to 1904.

It was Rao who invited Sir M. Visvesvaraya to be the chief engineer and secretary to the government of Mysore in 1909.