For the second house, which is still under construction, you will be able to claim tax benefits from the year of completion and possession. You will be able to claim aggregate of the interest paid during the construction period in five equal instalments beginning from the year in which the construction is completed, and possession is obtained. Since you will be staying in the house, the amount of overall claim for interest paid to your wife and the bank shall be restricted to Rs. 2 lakh, including the one-fifth portion of the interest paid during the construction period. Do note that you cannot set off losses under the ‘head income from house property’ beyond Rs 2 lakh in a year, whether you own one house or multiple houses. The unabsorbed loss is allowed to be carried forward for eight years for set-off against house property income only.