-Distance relay identifies the type and location of fault by measuring the transmission line impedance. However any other factors that cause miss calculating the measured impedance, makes the relay detect the fault in incorrect location or do not detect the fault at all. One of the important factors which directly changes the measured impedance by the relay is series capacitive compensation (SCC). Another factor that changes the calculated impedance by distance relay is fault resistance. This paper provides a method based on the combination of distance and differential protection. At first, faulty transmission line is detected according to the current data of buses. After that the fault location is calculated using the proposed algorithm on the transmission line. This algorithm is based on active power calculation of the buses. Fault resistance is calculated from the active powers and its effect will be deducted from calculated impedance by the algorithm. This method measures the voltage across SCC by phasor measurement units (PMUs) and transmits them to the relay location via communication channels. The transmitted signals are utilized to modify the voltage signal which is measured by the relay. Different operating modes of SCC and as well as different faults such as phase-to-phase and phase-to-ground faults are examined by simulations.