This research introduces a Power Harmonics Suppression (Damping) based generation of reference currents for reliable operation of DFIGs with harmonic distortion in grid voltage. The imbalances and dominant harmonic components (negative sequence as well as 5 ^th and 7 ^th harmonics) in the grid voltage, induces stator active and reactive power oscillations of 200Hz, 300Hz, 400Hz and 600Hz. Further this lead to braking & forward torque and unreliable performance of DFIG aiding to grid instability issues. Thus, a modified set of current references are created for the d-q axes current control and these references are designed to reduce the imbalances and harmonics in electromagnetic torque, as well as stator active and reactive power, with a single objective of damping power oscillations. Simultaneously, the GSC is focused on mitigating fluctuations in the DC- link voltage while enabling UPF operation on the grid side. The novel current references for RSC and GSC are derived by incorporating negative sequence as well as 5 ^th and 7 ^th harmonic compensating currents along with the steady state current references, to acquire the desired targets. The overall system is validated with PSCAD/EMTDC simulations and using OPAL-RT OP4510 real-time simulator, on a 2.3kVA DFIG.