Method and apparatus of video coding are disclosed. According to one method, in the decoder side, a predefined Intra mode is assigned to a neighboring block adjacent to the current luma block when the neighboring block satisfies one or more conditions. An MPM (Most Probable Mode) list is derived based on information comprising at least one of neighboring Intra modes. A current Intra mode is derived utilizing the MPM list. The current luma block is decoded according to the current Intra mode According to another method, a predefined Intra mode is assigned to a neighboring block adjacent to the current luma block if the neighboring block is coded in BDPCM (Block-based Delta Pulse Code Modulation) mode, where the predefined Intra mode is set to horizontal mode or vertical mode depending on prediction direction used by the BDPCM mode.