For Second House: Deemed to be rented, full housing loan interest is deductible

The limit of deduction towards home loan interest payment can be determined based on full facts. Assuming that you do not own more than one house, the said house shall be considered self-occupied property.

You shall be eligible to claim a deduction towards interest payment of Rs. 1.5 lakh per fiscal (Assuming the house was acquired on or after 1 April 1999).

However, if you own more than one house and the other house is self-occupied, then the other house shall be considered as deemed to be let out property.

In such a case, you could claim the entire interest payment as deduction against the deemed rental income, which needs to be offered to tax. Also, you could claim deduction towards property tax, water tax as well as standard deduction of 30 % of the deemed rental income.
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