A method employing an improved rate-matching algorithm used during transmission and reception of information packets involves performance of a complete process of puncturing or repetition in two steps. In the first step the action to be taken on each bit of the input register is calculated and is stored in the form of flag bits in flag register. In step 2, puncturing/repetition are performed on input bits and the output is stored in output register. Input bits can be processed in groups in step 2, reducing the number of steps required in the complete rate matching process.