The upcoming H.264/MPEG-4 Advanced Video Coding (AVC) video compression standard promises a significant improvement over all previous video compression standards. In this paper, we study the impact of low delay constraint on the rate control algorithm proposed for AVC, and show that the performance of AVC rate control is degraded under such low delay constraint. This results in PSNR degradation and many skipped frames. We then propose an improved rate control scheme to effectively allocate the number of bits and monitor the buffer fullness. Simulation results show that our proposed rate control scheme encodes the video sequences with less frame skipping and with higher PSNR compared to rate control for AVC.