Income tax section

Exemption means Income of a person is Zero according to Income Tac Laws. For example : In India, Basic Exemption Limit is Rs. 2,50,000/-, this means if you earn upto Rs. 2,50,000/- in any financial year, according to Income Tax, You have earned Rs. 0, and therefore Income Tax on Rs. 0 is also zero, that means you need not to pay Income Tax on that Income (but only if it is upto Rs.2,50,000/- for one year only).

Deduction means some amount that is allowed by Income Tax Laws, to Deduct from your total income. Suppose your total Income in one Financial Year is Rs. 3,50,000. Exempted Income = Rs. 2,50,000. So, 3,50,000 - 2,50,000 = Rs. 1,00,000. On this 1 lac you have to pay tax. But you are given with some Deduction, say for example Rs. 5000. So, you can subtract this 5000 from Rs. 1 lac, then total income comes to Rs. 95000. Now, you need to pay tax on this Rs. 95000 ( not on Rs. 1 lac.).

Here i took Deduction of Rs. 5000 as an example. Actually, you can take different deductions as per Income Tax Laws only.

Incomes which donot form part of total income are exempt income whereas, deductions are those which reduces the Gross Total Income.Deduction are available from heads (e.g 24(b)), as well as from GTI (80C to 80U).Deductions are available for exp. (e.g 80C) as well as for incomes (e.g 80TTA) from GTI.

Very Simple

Section 10 is define you  exempt income (tax free income )

section 80 is define deduction of you expenses and investments from you taxable income