An improved process for the synthesis of 3-[2-[4-((6-fluoro-1,2-benzisoxazol-3-yl)-1-piperidinyl]-6,7,8,9-tetrahydro-9-hydroxy-2-methyl-4H-pyrido[1,2-a]-pyrimidin-4-one (Paliperidone) and Paliperidone Palmitate through a novel intermediate (2-Chloroethyl)-6,7,8,9-tetrahydro-2-methyl-9-hydroxy-4H-pyrido [1,2-a]pyrimidine-4-one Palmitate ester.