Can Meditation lead to Depression or Panic Attacks?

Generally, No.

However, apparently, in very rare cases, some people complain of feeling more depressed or have panic attacks when they do meditation. This can only happen when there are carcasses buried underneath our minds from the past, which have not been dealt with.

This obviously doesn't mean that such people cannot take advantage of meditation process. In fact, in my personal opinion, its quite opposite - there is no one who would not get benefitted from clarity of mind. However, in such cases especially, it becomes important to have the Right Understanding before one starts meditating. The very fact that the person's depression could increase as soon as other distractions decrease, is because the person had developed unskillful thought patterns out of ignorance.

Therefore, to remove stress, one has to cultivate the mind as a whole, which is not just concentration or mindfulness alone without the wisdom to deal with it.

               ¨ Concentration is focusing on one object - this sharpens the mind.     
               ¨ Mindfulness brings a 'non-judgmental' awareness to our moment to moment feelings, perceptions, thoughts, etc.
When the above 2 are employed, it would naturally enable us to be close to reality and that includes seeing the stress (even the subtler stress that we never considered to be a form of stress), the causes of that stress, etc. In short it will unearth all the garbage that was covered under many layers.

And it goes without saying that if one does not have the right understanding or the wisdom to deal with the garbage, one possibly could be more stressed or anxious on witnessing the garbage.

Just like you would not detox the body when your immune system is extremely weak and cant fight the toxins from the body, similarly, if one experiences panic attacks or increased depression on meditating, one should have a basic 'right understanding' before one digs up inside the mind.

It is true that right understanding increases with meditation. However, there must be some basic level of understanding before we go for meditation. Buddha laid down Noble 8-fold path to overcome stress: And it starts from 'Right Understanding/View'; And only towards the end do we have 'Concentration' and 'Mindfulness'.