||The optical properties of hexagonal InN have been studied using the all-electron approach based on density functional theory (DFT). The full-potential augmented plane wave method is employed with two different exchange-correlation potentials, the Perdew–Wang (PW) and the Engel–Vosko (EV) approximations. In addition, both non-relativistic and relativistic approximations are considered. We found that the PW and relativistic approximations give a metallic ground state; whereas using the EV and non-relativistic approximations a semiconductor phase is obtained, opening the gap up to 0.83 eV. Besides, the calculated interband transitions of the complex dielectric function up to 13 eV show favourable agreement with the recent spectroscopic ellipsometry results.