Assuming that the house in your name or if that you are a co-owner, you will get improvement loan interest benefit to the tumne of 1,50,000 (this includes interest of your loan + improvement). The Principal towards home improvement cannot be claimed for tax deduction though. This for loan taken after April 1, 1999. If it was before this date, the interest claim is only for 30,000.

If improvement is not for your own home, you get no benefit.

It does not matter if they are two properties so long as you are an owner.