NOVELTY - Improved process for preparing dronedarone (I), comprises: e.g. (a) Friedel-Craft acylation of 2-n-butyl-5-nitrobenzofuran (II) with para-anisoyl chloride (III) in presence of Lewis acid and solvent to obtain 2-n-butyl 3-(4-methoxy benzoyl) 5-nitro benzofuran (IV); (b) de-methylation of (IV) in presence of Lewis acid and organic solvent to obtain 2-n-butyl 3-(4-hydroxy benzoyl) 5-nitro benzofuran (V); and (c) oxygen-alkylation of (V) with 1-chloro-3-di-n-butylamino propane (VI) in organic solvent in presence of an inorganic base and metal iodide catalyst.    USE - The process is useful for preparing (I) (claimed), which is useful for preventing cardiac arrhythmias including atrial fibrillation or atrial flutter. No biological data given.    ADVANTAGE - The improved process provides: the purified hydrochloride of (I) that meets the criteria of conference on harmonization guideline, where all the impurities present in (I) are below 0.1% (claimed); avoids the use of hazardous chemicals and column chromatography, hence it is cost effective and environmentally friendly; and provides (I) with improved yield.    DETAILED DESCRIPTION - Improved process for preparing dronedarone of formula (I) or its salts, comprises: (a) Friedel-Craft acylation of 2-n-butyl-5-nitrobenzofuran of formula (II) with para-anisoyl chloride of formula (III) in presence of a Lewis acid and solvent to obtain 2-n-butyl 3-(4-methoxy benzoyl) 5-nitro benzofuran of formula (IV); (b) de-methylation of (IV) in presence of a Lewis acid and an organic solvent to obtain 2-n-butyl 3-(4-hydroxy benzoyl) 5-nitro benzofuran of formula (V); (c) oxygen-alkylation of (V) with 1-chloro-3-di-n-butylamino propane of formula (VI) in an organic solvent, in presence of an inorganic base and metal iodide catalyst to obtain 2-n-butyl 3-(4-(3-di-n-butylamino-propoxy)benzoyl) 5-nitro-benzofuran of formula (VII); (d) reduction of (VII) with a heterogeneous metal catalyst in an organic solvent to obtain 5-amino 3-(4-(3-di-n-butylamino-propoxy)benzoyl) 2-n-butyl benzofuran of formula (VIII); (e) purification of (VIII) by forming its acidic salt in an organic solvent; (f) neutralization of the obtained acidic salt with a base to obtain pure (VIII); (g) mesylation of (VIII) in presence of mesyl chloride and base in an organic solvent to obtain (I) and converting (I) into salt; and (h) purification of the salt of (I).