New Delhi (Agencies): Relief may finally be around the corner for price rise-hit Indians as Union Finance Minister Pranab Mukherjee is expected to raise the income tax exemption limit for individuals.

"Finance Minister Pranab Mukherjee is alive to the price situation and its impact on the common man," sources said, adding he would positively consider the issue of hiking tax exemption limit.

Moreover, they said, as the government is committed to raise the income tax exemption limit from Rs 1.6 lakh per annum to Rs 2 lakh for Direct Taxes Code (DTC) in 2012-13, tax payers could expect at least some relief in the upcoming Budget on February 28.

"The Finance Ministry would keep in mind the high inflation in the Budget. Since there is no dearness allowance for a vast section of the society, hike in income tax exemption limit is likely," a source told agencies.

Presently, income up to Rs 1.6 lakh is not taxable for individuals. For women and senior citizens, the limit is 1.9 lakh and 2.4 lakh, respectively.

However, under the DTC Bill which was introduced in Parliament last year, the I-T exemption limit is of 2 lakh.

In the DTC bill, the government seeks to widen tax slabs and make calculation easy by levying 10 per cent rate on income between Rs 2 lakh and Rs 5 lakh, 20 percent on Rs 5-10 lakh and 30 percent above Rs 10 lakh.

The DTC, which would replace the Income Tax Act, is slated to come into effect from April next year.

"Since inflation is eating into the income of the people, some of DTC provisions can be implemented to benefit the common man," the official added.

Inflation, particularly the food inflation, has been a concern for both the government and the common man. For past few months, food prices have been staying at very high levels.