Early detection and diagnosis of incipient faults is desirable for on-line condition assessment, product quality assurance and improved efficiency of induction motors running off power supply mains. In the applications of three-phase induction motors in industry, the inner faults may occur in their rotor and stator windings. These kinds of faults will make serious health problems on the motor. This paper presents a new protection scheme for internal short circuit faults occurring with a degree (single or multiple) in three-phase induction motors. The results are compared with traditional outcomes existed from Fast Fourier Transformation (FFT) of the motor currents. The proposed algorithm is simpler and only uses stator currents. There is no need any other sensor knowledge.