In this paper, reduction in both the torque ripple and common-mode voltage (CMV) along with neutral-point capacitors voltage balancing in three-level inverter (TLI)-fed three-phase induction motor (IM) drive is targeted. The drive is controlled by modified direct torque control (DTC) technique. The TLI is used to obtain the maximum number of voltage vectors (VVs). Due to availability of more VVs, the chance of selecting the optimal VVs increases by the use of TLI as compared to its two-level counterparts. In the proposed modified DTC method, the VVs are selected so that the torque ripples and CMV are reduced. Among available 27 VVs, 13 candidate VVs are opted. In order to reduce the torque ripple, the pair of VVs is formed based on their minimum and maximum dc-link voltage value. To reduce the CMV magnitude, the VVs are selected based on their different leg/pole voltage generation ability. For neutral-point voltage balancing, the VVs are selected so that both the input capacitors voltages are equal. The aforementioned targets are achieved simultaneously with both simple control algorithm and fast dynamic response attained. To validate the propose method, the simulations and experimental results are presented.