Treasury Secretary Donald T. Regan says there's little chance for passage of legislation that would allow cash-strapped steel and auto companies to trade in their unused investment tax credits for cash from the Treasury to finance capital investment.

Meanwhile, in another tax issue, the White House said it opposes legislation to tax employe fringe benefits, such as automobiles and tuition breaks.

Regan said in an interview that the tax credit plans, which the steel and auto industries are pushing, "were knocked out" last year when Congress repealed safe harbor leasing measures. Waving off notions of such legislation, Regan added, "I don't think this has much chance of success."

However, Rep. Barber Conable (R-N.Y.) who sponsored the legislation with House Budget Committee Chairman Rep. James R. Jones (D-Okla.), said yesterday that the effort is not yet dead. Success of the bill "depends on the kind of pressure the industries can bring to bear on Congress," he said.

Conable said many industries that were unprofitable and thus unable to use the credits are looking to this legislation or protectionism to help them accrue funds for capital investment.

The proposed law would allow corporations that don't have a tax liability to draw down 85 percent of the accumulated value of their credits in cash to be used for new plant, equipment and modernization. The purchase would have to be made in advance of the drawdown to ensure that only sound companies capable of raising funds in the private capital markets, not those flirting with bankruptcy, would benefit.

The companies would have to repay the entire value of the credits by 1990. However, the tax credits against future liabilities would then be restored to them.

The bill's opponents say it would cost the Treasury up to $12 billion in 1984, although proponents of the measure have said it would cost no more than $3.7 billion in revenue losses during its first year.

A Treasury Department spokeswoman said yesterday that the department had not made a decision on whether to support legislation to tax fringe benefits and that it still planned to prepare testimony for Congress explaining its views.

However, White House spokesman Larry Speakes said, "We don't plan to tax benefits and we hope they have the word at Treasury."

Conable, also sponsor of a fringe benefit tax bill, said the White House had told him they were not in favor of a tax increase, but didn't tell him directly that they opposed his bill.

Previously, John E. Chapotan, assistant Treasury secretary for tax policy, said the exemption from taxation of some fringe benefits, which have been a rising percentage of total worker compensation recently, has had "serious effects" on federal revenues.

Chapotan acknowledged in June that there were some "political considerations" in taxing fringe benefits.