Tax deduction

A tax deduction is an amount deducted from taxable income, usually based on expenses such as those incurred to produce additional income. Tax deductions are a form of tax incentives, along with exemptions and tax credits. The difference between deductions, exemptions, and credits is that deductions and exemptions both reduce taxable income, while credits reduce tax.

This article is about the deduction of expenses for the purpose of calculating taxable income. For tax deducted at source, see Withholding tax.
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