Following tax cuts announced on Thursday, Zenith Computers will reduce the prices of its personal computers by 10-12 per cent, bringing the prices of entry level computers to Rs 16,000, Raj Saraf, chairman and managing director of the company, said in New Delhi.

"As a result of the duty cuts, we will announce a price cut of 10-12 per cent in our PCs. Even though exact price cuts will depend on the models, for the entry level models, the prices will come down to Rs 16,000 from the earlier Rs 18,000," Saraf told PTI.

He said as the laptops had also been made part of the baggage being removed from the customs duty, Zenith will also reduce the Notebook computer prices by 10 per cent.

"Our laptops, following the price cuts will cost around Rs 65,000 against the earlier price of Rs 73,000," Saraf said.

The company will also unveil a cost effective multimedia PC model at a price of Rs 15,000-Rs 16,000.

The new PC will have a 2Ghz Celeron processor, 128 MB RAM, and a 40 GB hard disk.

Finance Minister Jaswant Singh on Thursday gave a number of tax incentives to the IT hardware sector; he brought down the excise duty on computers to eight per cent from 16 per cent and removed the four per cent special additional duty and customs duty on IT and electronics products.