Zone 3 of a distance relay is used to provide the remote backup protection in case of the failure of the primary protection. However, the risk of maloperation under stressed conditions such as heavy loading, voltage, and transient instability is quite high. Zone 3 is used in combination with the derivatives of the voltage and current, etc. to prevent maloperation. At times, the impedance I characteristics that restrict the tripping area of relay are used to avoid maloperation due to load encroachment. This paper presents a novel zone 3 scheme based on combining the steady-state components (Le. 60 Hz) and the transient components (TCs) using a state diagram that visualizes the sequence of studies that emanate from the sequence of events. The simulation results show that the novel zone 3 distance relay elements using the proposed method operate correctly for the various events.