Abstract: Supply of uninterrupted sinusoidal voltage of constant magnitude is the most important aim of the electrical distribution system, but this task is very tough and is becoming more difficult due to the increasing size and number of nonlinear and poor power factor loads. Some of the most important causes of poor power quality is harmonics and high neutral current. Harmonics and neutral current deteriorate power quality as well as affect the system at large and makes significant impact. In this paper a control scheme based on PI controller has been proposed for generation of reference current to mitigate the harmonics and neutral current for two different topologies. The proposed methodology not only reduces the complexity but also offers simplicity to implement and increases reliability of the system. Analysis and simulation of three phase four wire shunt active power filter under balanced and unbalanced load condition have been done using MATLAB/ SIMULINK and detailed simulation level results have been presented to validate the proposed methodology.