The Sebi is reviewing the impact on the stock market turnover from a possible scrapping of STT, which is levied on all sale and purchase in the equity market.

The regulatory authority is in favour of a complete or phased withdrawal of the levy and it expects any such move to positively impact the market turnover, a senior official said.

The Sebi is assessing the estimated gains in terms of the overall stock market turnover volumes as also for the savings that investors and traders might realise from the withdrawal of this tax, which is being levied on stock market transactions since October 2004, he added.

The regulator would submit the findings of its review to the Finance Ministry at the time of its submissions for the next year's union budget proposals.

The ministry's markets division is said to be in favour of reviewing the STT framework with a view of either scrapping it altogether or in a phased manner, but a final call is likely to be taken by the revenue department as such a proposal would lead to loss of tax revenues for the government.