A tax deduction is an expense that you can deduct from your income. Deductions help you get lower net salary, and thus lower taxation. Let's take an example:

You have 500,000$ in gross salary
You have 0$ in deductions
In this imaginary case, your tax is 30%
In this case, you would have to pay = 150,000$ in tax

Let's say that in another case you have realized some loss on capital income (shares, instruments, etc.). In this case, you had a loss of 50,000$ in shares and 50,000$ in funds.

You have 500,000$ in gross salary
This time you have thus realized 100,000$ as a deduction for your losses
The tax is also in this case at 30%
Here you would "only" pay tax for a net income of 400,000$. This is due to the deductions shown above.
The tax had thus this year been 120,000$ versus 150,000$ without deduction.