Section 24 of income tax

If the house is self-occupied, then Rs. 150,000/- can be claim as deduction, and if the house is let out, then actual interest paid can be claim as deduction.

If the house is let out, interest for the pre-construction period (in 5 equal instalments) as well as for the current year is deductible without any limit.

However, if the property is self occupied, interest is not deductible as the construction is not completed within 3 yrs from the end of the FY 09 in which the loan was borrowed.