<PAGE>


                    T. ROWE PRICE TAX-FREE INCOME FUND, INC.
                                   (the Fund)

                          PLAN PURSUANT TO RULE 18f-3

     The Fund hereby adopts this plan pursuant to Rule 18f-3 under the
Investment Company Act of 1940 (the 1940 Act), setting forth the separate
arrangement and allocation of income, realized gains and losses, unrealized
appreciation and depreciation, and expenses of each class of shares. Any
material amendment to this plan is subject to prior approval of the Board of
Directors, including a majority of the independent Directors.

                                    EXPENSES

TAX-FREE INCOME SHARES
                         Tax-Free Income shares shall bear all expenses incurred
                         directly on behalf of the Tax-Free Income shares
                         ("Class Level Expenses"). Tax-Free Income shares shall
                         also bear that portion of the Fund's expenses not
                         incurred directly by a particular class ("Fundwide
                         Expenses") as the net assets of the Tax-Free Income
                         shares bear to the net assets of the Fund.

TAX-FREE INCOME ADVISOR
SHARES
                         Tax-Free Income Advisor shares shall bear all expenses
                         incurred directly on behalf of the Tax-Free Income
                         Advisor shares, including 12b-1 fees ("Class Level
                         Expenses"). Tax-Free Income Advisor shares also bear
                         that portion of Fundwide Expenses as the net assets of
                         the Tax-Free Income Advisor shares bear to the net
                         assets of the Fund.


                        INCOME AND GAIN/LOSS ALLOCATIONS

     Income, realized gains and losses and unrealized appreciation and
depreciation will be allocated to each class on the basis of the net assets of
that class in relation to the net assets of the Fund.
                          DIVIDENDS AND DISTRIBUTIONS

     Dividends and other distributions paid by the Fund to each class of shares
will be paid on the same day and at the same time, and will be determined in the
same manner and will be in the same amount, except that the amount of the
dividends and other distributions declared and paid by a particular class may be
different from that paid by another class generally only because of differing
Class Level Expenses borne by each class.



<PAGE>


                          EXCHANGE PRIVILEGE

     Each class of shares is exchangeable for the other class of shares or for
the same or other classes of shares of any T. Rowe Price mutual fund subject to
the conditions of any such fund's then-current prospectus.

                                    GENERAL

     Each class of shares shall have exclusive voting rights on any matter
submitted to shareholders that relates solely to its arrangements and shall have
separate voting rights on any matter submitted to shareholders in which the
interests of one class differ from the interests of any other class.

     On an ongoing basis, the Directors, pursuant to their fiduciary
responsibilities under the 1940 Act and otherwise, will monitor the Fund for the
existence of any material conflicts among the interests of its several classes.
The Directors, including a majority of the independent Directors, shall take
such action as is reasonably necessary to eliminate any such conflicts that may
develop. T. Rowe Price Associates will be responsible for reporting any
potential or existing conflicts to the Directors.

L:\TRPPROD\EDG\Agreements\12b-1 Agreements\TIA Rule18F3.fm