Deduction

You can claim the principal repayment of both loans for deduction under section 80C, subject to a maximum limit i.e., presently Rs.1,50,000/-.

As per Income Tax Act, if you have two houses, you can only show one house as a self occupied property. For the other house, you have to calculate rent as deemed to be letout (Refer Section 23(4)) and from that rent you can deduct the interest you had paid. In this case you will be eligible to get deduction for the full amount of interest paid i.e., the ceiling limit applicable to Self-occupied property (Currently Rs.2,00,000) is not applicable.