However, Star Health and Allied Insurance Company was up 0.27%.

The Nifty 50 index was down 73.60 points, or 0.42% at 17,588.55.

Finance Minister Nirmala Sitharaman gave a renewed thrust to the new tax regime in Budget 2023-24 announcement today. The tax rebate has been extended on income up to Rs 7 lakh under the new tax regime.

Under the new income tax regime, individuals can opt to pay tax at the reduced rates without claiming the various tax exemptions and deductions.

Insurance stocks tumbled on concerns that the new tax regime may reduce demand for new insurance policies. Many taxpayers take insurance policies only to benefit from Section 80C deduction. They will not be inclined to do so under the new tax regime.

The tax breaks that will not be available under the new regime include Section 80C deductions (Investments in PF, NPS, Life insurance premium), Section 80D (medical insurance premium), HRA and interest paid on housing loan. Tax breaks for the disabled and for charitable donations will also be gone.

"For better targeting of tax concessions and exemptions, I propose to to limit income tax exemption from proceeds of insurance policies with very high value," FM Sitharaman said in her budget speech today.

The budget also stated: "It is proposed to provide that where aggregate of premium for life insurance policies (other than ULIP) issued on or after 1st April, 2023 is above Rs 5 lakh, income from only those policies with aggregate premium up to Rs 5 lakh shall be exempt. This will not affect the tax exemption provided to the amount received on the death of person insured. It will also not affect insurance policies issued till 31st March, 2023."