With reference to Income Tax Act, 1961, briefly discuss the difference between General Anti Avoidance Rules 'GAAR' and Specific Anti Avoidance Rules 'SAAR'.

Specific Anti Avoidance Rules 'SAAR' SAAR is specific and help to reduce time and costs involved in tax litigation. SAAR provide certainty to any taxpayer while formalizing specific arrangements. These don't provide any discretion to the tax authorities. There is always a possibility that the taxpayers find loopholes and circumvent these limited application, specific provisions. General Anti Avoidance Rules 'GAAR' These involve necessarily granting the discretion to the tax authorities to invalidate the arrangements as impermissible tax avoidance. They have a far broader application and hence interpreted in a more extensive manner. GAAR has the potential to counter more effectively and outsmart the taxpayers in their "out of the box thinking" and their approach in devising new means of tax avoidance.