The 2006 Champions Trophy will after all be held in India, with the government Thursday announcing full tax exemptions to facilitate the Indian cricket board to stage the tournament.

Finance Minister P. Chidambaram announced this after a cabinet meeting, chaired by Prime Minister Manmohan Singh, approved to amend Section 10 of the Income Tax Act 1961 to enable multi-national sports events take place in the country.

"This exemption is being allowed to promote multi-national sports events in India," Chedambaram told reporters.

The tax exemption was among the items on the cabinet's agenda.

The Champions Trophy had been shifted twice out of India - in 2002 it was moved to Sri Lanka and in 2004 the tournament was staged in England - due to the government's refusal to grant full tax exemption as sought by the International Cricket Council (ICC), which organises the game's most prestigious tournament after the World Cup.

Sports events deserving such tax breaks, clarified Chidambaram, must be approved by recognised international body responsible for regulating the relevant sports and having multinational participation.

"If it is only for truly for multi-national events approved by the international body concerned, then the government did not want to restrict this exemption just to cricket, but other sports as well.

Had the Board of Control for Cricket in India (BCCI) failed to get the exemption, the Champions Trophy would have been shifted to Pakistan, chosen as the stand-by country by ICC.