The two actors met on the set of the 2009 Bollywood comedy.
A source told DNA India: "Yes, they are getting engaged soon. Both of them have decided that it is time they took another step forward in their relationship.
"Recent reports suggested that they were moving in with each other, but Kunal denied it all. The couple decided against a live-in relationship. They will get engaged first, then move in or get married.
"The family, including Soha's mum, actor Sharmila Tagore, loves Kunal. They also think that it's the right time to get engaged, since Soha's brother, actor Saif [Ali Khan], is tying the knot with his girlfriend Kareena [Kapoor] in March-April."
In April 2011, Khan said that she had no plans to act with her boyfriend again in case seeing a real-life couple puts audiences off.
Saif Ali Khan announced his own plan in November to marry girlfriend Kapoor next year.