The present invention utilizes yeast Candida tropicalis (NRRL 12968) for xylitol production, as an alternative and unexplored strain with high bioconversion rate and stability at higher initial xylose concentration. Different parameters are optimized for batch fermentation of xylose to xylitol such as initial xylose concentration, aeration (vvm), agitation (rpm), percent inoculum addition, and oxygen transfer rate. Maximum xylitol yield of 0.7 g/g of xylose is obtained with 3.33% inoculum, 250 g/l of initial xylose concentration, 0.2 vvm of aeration rate, and two stage agitation strategy comprising of 500 rpm for 0-24 hrs and 400 rpm for 24-72 hrs at not more than 72 hrs of fermentation time. The present invention coins a novel process mode of fermentation where the batch process is extended with continuous fermentation at optimum dilution rate of 0.02/hr with effective residence time of 52 hrs. Productivity of ‘batch followed by continuous’ process is 2.5 gm/lit/hr which is 1.34 times higher than batch and/or continuous process alone.