BENGALURU, Feb 1 (Reuters) – Indian shares reversed earlier gains to trade lower on Wednesday, led by a fall in insurance companies after the country’s Union budget proposed to limit tax exemptions for insurance proceeds, while Adani Group shares tumbled.

The Nifty 50 index (.NSEI) was down 0.3% at 17,636, while the S&P BSE Sensex (.BSESN) rose 0.3% to 59,714.32 as of 2:28 p.m. IST.

The indexes rose as much as 2% after Finance Minister Nirmala Sitharaman raised the rebate limit for personal income tax to 700,000 rupees from 500,000 rupees.

Indian insurance companies were top losers post budget, with HDFC Life (HDFL.NS), SBI Life Insurance (SBIL.NS), ICICI Prudential Life Insurance Co (ICIR.NS), Life Insurance of India (LIFI.NS), General Insurance Corp (GENA.NS) and Max Financial (MAXI.NS) tumbling between 4.5% to 11%.

The sharp decline comes after Sitharaman proposed to tax total returns upon maturity of life insurance policies (except ULIPs) issued on or after April 1, 2023, if the aggregate premium of such policies is more than 500,000 rupees a year.

Shares of Nifty 50-listed Adani Enterprises (ADEL.NS) plunged 15% while Adani Ports and Special Economic Zone (APSE.NS) tumbled 10% on a broader selloff in Adani Group firms, which has now swelled to $82 billion since the Hindenburg report.

Reporting by Bharath Rajeswaran and Nallur Sethuraman in Bengaluru; editing by Eileen Soreng, Savio D’Souza and Janane Venkatraman

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