The present invention discloses a process of xylitol production from pure xylose, xylose containing liquid extract from the acid pretreated biomass (LEPB) and co-production of ethanol and xylitol from dilute acid pretreated lignocellulosic biomass by natural S. cerevisiae DBT-IOC S24 (MTCC25086). The present invention also discloses a process of xylitol production wherein a thermo and inhibitor tolerant S. cerevisiae DBT-IOC S24 (MTCC25086) natural strain has been induced to produce xylitol from xylose at defined process parameters using xylose containing diluted acid pretreated biomass as well as from xylose containing synthetic media in presence of glucose, lignocelluloses biomass derived xylitol inducer maintaining aeration at 1VVM and pH at 5.0 in the medium.