When transformer is energized, a transient current up to 10 to 15 times larger than the rated transformer current can flow for several cycles. The differential protections are mainly sensitive during this time, as the inrush current flows just on one site of the transformer and so it creates false differential current. One of the basic principles is blocking of the differential element by the second harmonic. This article tries to derive the amount of higher harmonics in the inrush current and discuss the necessary relay setting