In this research paper, an inductively coupled distributed static compensator (IC-DSTATCOM) for three phase three wire (3P3W) electric power distribution system (EPDS) is proposed. The contraction of power quality (PQ) was marked as a perilous droop mode bump into direct coupled distributed static compensator (DC-DSTATCOM). To regain the PQ, inductive coupling transformer is assisted in conjunction with DC-DSTATCOM. The system equivalent circuit of IC-DSTATCOM is accomplished by take into account of impedance of both transformer and DC-DSTATCOM to reveal the filtering technique. The filtering icos∅ mechanism is performed by following the generalized mathematical approach using MATLAB/Simulink. A case education is reviewed in detail to illustrate the performance of both DC-DSTATCOM and IC-DSTATCOM. The IC-DSTATCOM is amplified healthier as compared to other in terms of harmonics shortening, good power factor, load balancing, and potential regulation. To examine the effectiveness, simulation outputs of the IC-DSTATCOM with different PQ parameter indices are presented by following the benchmark measure of IEEE-2030-7-2017 and IEC-61000-1 system code.