Multilevel inverter topologies have received an increasing importance for their modular structures with better integration of renewable energy sources and reduced filtering requirements. But reliability is compromised in the process of decreasing the number of switches to produce the maximum number of voltage levels. This paper elevates a single‐phase fault‐tolerant inverter topology, which is modular in structure. The proposed inverter is analyzed for open‐ or short‐circuit faults in sources and open‐circuit faults in switches. Sine Pulse Width Modulation with multicarriers technique is used to control the circuit. The carrier signals are reconfigured under fault conditions based on levels to be generated by bypassing the faulted switch or source. The circuit is simulated in MATLAB/SIMULINK, and experimental setup is developed to claim the fault tolerance of proposed inverter.