Later she became very active in politics and became the Vice-President of All India Democratic Women's Association in 1981.
She also came forward, during the anti-Sikh riots in 1984 after Indira Gandhi's assassination, in defense of Sikh families and shops near her clinic and did not allow any of them to be harmed.
Captain Lakshmi Sehgal was awarded the Padma Vibhushan by the President of India in 1998.
A freedom fighter, dedicated medical practitioner, and an stupendous leader of the women's movement in India, Captain Lakshmi Sehgal, breathed her last on 23rd July 2012 as a result of cardiac arrest, at the age of 97.
Lakshmi Sehgal is survived by her two daughters Subhashini Ali and Anisa Puri; her grandchildren Shaad Ali, Neha and Nishant Puri; and by her sister Mrinalini Sarabhai.