Indium tin oxide (ITO) is a transparent conducting material used in optoelectronic applications. In order to optimize the optical properties of ITO, it is necessary to determine these properties as a function of the free carrier concentration (i.e., doping In2O3 with Sn). Based on an ab initio Hartree-Fock calculation of the energy band diagram of indium oxide and indium oxide doped with tin, an empirical relationship of the electron effective mass as a function of the ideal free carrier concentration is established. The importance of the varying electron effective mass in the prediction of the complex dielectric function, the refractive index, extinction coefficient, and finally the optical transmission based on Drude’s theory is shown here by comparing the estimated results with measured and published results. The agreement between estimated values and measured or published experimental results is very good.