The current study aims to understand the impact of psychological distress caused by the COVID-19 pandemic on life satisfaction and wellbeing, in the Indian context. The study also analyses the differences in these effects between the first and second waves of the pandemic. For this purpose, a survey was conducted during the two waves of the pandemic. Eight hundred eighty-four and 925 respondents participated in the first and second waves, respectively. The study showed that depression, anxiety, and stress negatively related to life satisfaction and wellbeing during both waves. The study also showed that the effects were stronger during the second wave compared to the first. Life satisfaction and wellbeing of women were found to be affected to a higher level than those of men, due to psychological distress. The study showed that a combined approach involving coping mechanisms and health care can help manage the psychological issues that arise with crisis situations such as the COVID-19 pandemic.