Spray pyrolysis method was applied for the preparation of indium oxide ($In_2O_3$) thin films, by varying the substrate temperature range from 400-$600^{circ}C$. All the samples were characterized at room temperature by using X-Ray diffraction, Scanning electron microscopy, Atomic Force Microscopy, Hall Effect and UV-Visible spectrophotometry. The optimal substrate temperature required for obtaining films of high crystallographic quality was $575^{circ}C$. By comparing optical transmittance and electrical conductivity it was observed that the best figure of merit for these films was achieved for the same temperature and electrical resistivity was in the order of ${ ho}=1.47{ imes}10^{-1}[{Omega}cm]$. Gas sensing measurements of the films in ethanol showed enhancement with surface roughness and sheet resistance.