The Chancellor is "listening" to concerns about a planned rise in capital gains tax (CGT), Work and Pensions Secretary Iain Duncan Smith has said.
He told the BBC there would be "major exemptions" and the Government did not want to harm entrepreneurs or families.
Tory co-treasurer Stanley Fink earlier said a rise would deter entrepreneurs and could lead to an exodus of talent.
The government says it wants to raise CGT from 18% to a rate similar to income tax rates.
It could mean tax rates for non-business assets such as the profits from second home sales more than double to 40% or 50%.
Duncan Smith has said: "First of all, none of the levels have been decided. The chancellor has been clear he is listening to everything and he will make the final decisions.
"He's also talked about major exemptions for all sorts of different groups, because we don't want this to harm entrepreneurs, we don't want to harm families that are heading towards retirement who have actually saved.
But several Tory MPs are warning the move could hit entrepreneurs, second home owners and share holders - traditional Tory supporters.
Now Duncan Smith has signalled the Chancellor George Osborne is listening - saying he is determined to "take the sting" out of the change.
Although the Treasury deny any suggestion of concessions they say Osborne is examining all the options in front of him and will present his decision in the budget.
That may please backbench Conservatives but is unlikely to go down well with their political partners. The Liberal Democrat Energy Secretary Chris Huhne has already warned that any dilution of the Lib-Con deal on CGT would undermine the entire coalition agreement on tax.
"[Chancellor George Osborne] has discussed it with me and others and he is definitely looking for ways in which we can take the sting out of some of this."
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