Throughout the military, salutes are rendered by the junior person and returned by the senior person. In the navy, this is only customary when in uniform and covered (with a hat on) which typically means outside only. Such is not the case for the Army and Air Force. Since deploying, I’ve been saluted inside and outside, by covered and uncovered soldiers, and in uniform and out.
My favorite saluting ‘incident’ though was at Camp Virginia, Kuwait. Keep in mind the showers and bathrooms are located some distance from the barracks. As I was walking from my barracks to a meal, I came across a soldier walking from to the showers. He rendered a proper salute with a towel over his shoulder, toiletries under his arm, and shower shoes on his feet–and I returned the salute!
The 10th General Order states “To salute all officers and all colors and standards not cased.” So, in the navy, while you don’t return a salute if you aren’t in uniform, you would still render a salute if you recognize a senior officer. I was walking about Gator Alley on Camp Eggers, saw Lt Gen Caldwell (3-star) walking back from a workout (sweaty, exhausted, etc.). I rendered the proper honors and was surprised to see him salute. Undoubtedly this is funny just to Navy and Marines, but it does give me a much needed chuckled from time to time.