As per the survey conducted by UNICEF in 2018, more than 6 lakh neonatal deaths occur in India which makes India to stand in the worst rank of 12 among 52 developing or undeveloped countries. Also, every day an average of 7,000 neonatal deaths occur worldwide. A new born baby can survive outside of the mother's womb with the help of baby incubator, provided the required environment to be maintained by incubator for premature baby to sustain. But in recent time, improper incubator design, short circuit in incubator, gas leakage inside the incubator has caused accidental deaths of premature babies. This paper deals with the low cost neonatal incubator system that monitors neonatal vital parameters like pulse rate, body temperature and incubator parameters like moisture, oxygen percentage and light intensity. These parameters are monitored and moisture, oxygen percentage and light intensity are controlled with proposed incubator. These parameters are also sent to the hospital staff through IoT (Internet of Things), so that immediate action can be initiated to take proper care of neonatal that ensures safety to the neonatal (infant's) life by maintaining incubator parameters as required. In this paper in addition to these, one more important feature is included that is phototherapy to treat jaundice in new born.