You are eligible to claim a tax deduction against annual value of a house property in respect of the interest paid by you on a home loan taken to purchase the land and construct a property thereon. Further, a tax deduction for repayment of housing loan under Section 80C of the income tax Act is available.
Both these tax deductions are available only after you have constructed a building on the land in question (i.e. from the beginning of the financial year (FY) in which you have obtained possession of the property after construction).
The interest paid can be claimed as a deduction from your rental income, under Section 24 of the Act, capped to specified limits (Rs 2,00,000 under the current law) if the house is retained for your own use.