The performance of direct torque controlled (DTC) interior permanent magnet (IPM) machines is poor at low speeds due to a few reasons, namely limited accuracy of stator voltage acquisition and the presence of offset and drift components in the acquired signals. Due to factors such as forward voltage drop across switching devices in the three phase inverter and dead-time of the devices, the voltage across the machine terminals differ from the reference voltage vector used to estimate stator flux and electromagnetic torque. This can lead to instability of the IPM drive during low speed operation. Compensation schemes for forward voltage drops and dead-time are proposed and implemented in real-time control, resulting in improved performance of the space vector modulated DTC IPM drive, especially at low speeds. No additional hardware is required for these compensators.