Treatment of housing loan principal

Yes, you can get the 80C benefit on both loans. However, the total amount that you will be entitled to will be a total of Rs 150,000 (Rs. 1 Lakh  up to A.Y. 2014-15) across both the homes.

The interest paid on a home loan is not directly deductible from your salary income for either of your flat loans. Income from house property will be calculated for each flat you own. If  either of theses calculations shows a loss, this loss can be set off against your income from other heads.

As for Section 24 deduction, on your self occupied house you can take advantage of interest payments up to Rs.2,00,000  (Rs. 1.50  Lakh  up to A.Y. 2014-15).  For the other property, you can claim actual interest repaid, there is no limit for the same.