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Indian shares dropped on Monday, weighed down by Reliance Industries and Wipro after both companies posted weaker-than-expected quarterly results, while volatility spiked a day ahead of the union budget.

The NSE Nifty 50 was down 0.2% at 24,484.93, while the S&P BSE Sensex shed 0.16% to 80,474.6, as of 9:44 a.m. IST.

The volatility index spiked to a six-week high of 15.54.

Domestic and foreign investors are keenly awaiting possible tweaks in long-term capital gains tax in the union budget on Tuesday, according to analysts.

If the long-term capital tax on equities was to be raised, the rationale for these changes may be to create an even playing field between asset classes, Neelkanth Mishra, chief economist at Axis Bank said. Similarly, changes to Securities Transaction Tax may only be to curb speculation, he said.

In India, gains on listed shares are taxed at 10% if stocks are held for 12 months, and at 15% if held for less than 12 months. But other asset classes such as debt have higher long-term capital gains tax of 20%.

Eight of the 13 major sectors logged losses on Monday. The more domestically focussed small- and mid-caps reversed early losses to trade about 0.2% higher each.

Shares of Reliance dropped 2.4% after the oil-to-telecom conglomerate reported on Friday first-quarter profit below analysts' estimate due to lower margins on fuel sales.

Wipro, which missed quarterly revenue estimates on Friday due to weak demand in Europe and Asia-Pacific, lost 7.5%, becoming the top percentage loser in the Nifty 50 and information technology indexes.

HDFC Bank, the country's top private lender and the heaviest stock in the Nifty 50, rose about 2% after beating quarterly profit forecasts on Saturday as loan-loss provisions fell.

Kotak Mahindra Bank dropped about 3% on Monday after analysts flagged sequential drop in net interest margins as a concern, even as the lender's first-quarter profit trounced estimates during the weekend.