Zone 3 of the distance relay is used to provide the remote back-up protection in case of the failure of the primary protection. However, the risk lot mal-operations under stressed conditions such as heavy loading, voltage and transient instability is usually high. Zone 3 is used in combination with the derivatives of the voltage, and current, etc to prevent mal-operations. Sometimes, the impedance characteristics that restrict the tripping area of relay are used to avoid the mal-operations due to load encroachment. This paper presents a novel Zone 3 scheme based on combining the steady-state components (i.e. 60Hz) 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 operates correctly for the various events.