The present invention relates to pharmaceutical compositions of Teriflunomide or pharmaceutically acceptable salts thereof and method of preparation of such compositions. Typically, the composition according to present invention comprises about 1% w/w to about 30% w/w Teriflunomide, or a pharmaceutically acceptable salt thereof, about 0.1% w/w to about 0.8% w/w colloidal silicon dioxide, about 5% w/w to about 20% w/w disintegrant, about 0% w/w to about 40% w/w binder, about 0.1% w/w to about 2% w/w lubricant and the remaining percentage comprising diluents and optionally suitable agents to adjust the pH of the composition in the range of about 4.5 to 7.0.
