Yes, DEDUCTION is a Scrabble word!

Letter values in Scrabble US: D 2, E 1, D 2, U 1, C 3, T 1, I 1, O 1, N 1.

Is it a valid word?

DEDUCTION is a valid word in the official Scrabble dictionary (US), the UK Scrabble Dictionary and Words with Friends (ENABLE).

a reduction in the gross amount on which a tax is calculated; reduces taxes by the percentage fixed for the taxpayer's income bracket
an amount or percentage deducted
something that is inferred (deduced or entailed or implied)
reasoning from the general to the particular (or from cause to effect)
the act of subtracting (removing a part from the whole)
the act of reducing the selling price of merchandise

Also: tax write-off, tax deduction, deductive reasoning, price reduction.