2 Residential Houses

In your case both properties are used for self occupancy. In  case a person has more than one house property and those are used for self occupation then only one of them can be treated as Self occupied and the other will be treated as Deemed Let out property.

Benefit of Sec 23 (2) (b) can not be availed in this case. Sec 23 (2) (b) says that if a person has one residential house property which he can not occupy because of his employment at another place, and he has to reside at a building  not belonging to him at the place of job, then the residential property owned by  that person shall be  treated as self occupied property.

But in your case the property in which he is residing at the place of job is belonging to him only.

So one of the property shall be treated as Deemed Let out property at the choice of the assessee.

Int U/S 24(b) :

For self occupied property : up to Rs .1,50,000/-

For deemed Let out property : no limit subject to actual interest paid

In your case he can claim the entire Interest of Rs. 3,50,000/- subject to the above provision.

very rightly said by nilesh

YES,   I AGREE WITH NILESH