Deduction of interest on housing loan

Hi,
 
I want to know, how to calculate deduction of interest on housing loan.
 
Person A is the Resident indian Purchased 2 House in Mumbai on 01/Apr/2005 , and both the properties are financed by bank.
 
property 1. He is using this property for self-occupation. Value of property is Rs.50,00,000 and he has paid Rs.2,00,000 Interest for year.
 
property 2. He has let out this property for Rs 20,000 pm and he has paid Rs. 3,00,000 interest for the year. he has paid Rs.25,000 as muncipal tax .
 
Please tell me how to Calculate his income on house property assuming he has Rs. 30,00,000 income from Salary for 2007-2008
Thanks and regards,
Satish

Deduction u/s 24 on interest on housing loan  is allowed -  any amount of interest paid on borrowed money with out any limt  if it is let out and rental income is declared. After all deduction if net loss under the housing property can be set out with your salary income and as a result of that you can claim the refund if TDS is deducted on your salary income.