Unusual effects of post annealing on optical and dielectric properties of (Nb_0.5In_0.5)_0.01Ti_0.99O₂ (NITO-1.0%) are reported in the present study. The post-annealing performed under embedding in Al₂O₃ powder changes the color of a NITO-1.0% single crystal from black to yellow. Furthermore, the apparent increase in the relative permittivity due to the Maxwell–Wagner–Sillars effect, on the order of 10⁴, observed in the as-synthesized NITO-1.0% completely disappears after the post-annealing to reveal an intrinsic enhancement of dielectric response due to the co-doping of Nb and In. The relative permittivity of the post-annealed NITO-1.0% uniformly increases by approximately 120 from the original value of pure-TiO₂ over a wide temperature range from 4.2 K to room temperature. A temperature dependence of permittivity in the post-annealed NITO-1.0% shows behavior that is qualitatively identical to that of pure TiO₂, indicating that the co-doping gives rise to an additional dielectric response in TiO₂, probably through creation of defect complexes with large polarizability. The polarizability of the defect complex is estimated to be two hundred times greater than that of Ti⁴⁺, giving a new insight for the design of novel dielectric materials with large permittivity by means of complex defect engineering.