ID3 (Iterative Dichotomiser) algorithm is largely used algorithm for generation of decision tree which is developed by Ross Quinlan. ID3 algorithm generates Entropy which is use for calculation of information gain. ID3 algorithm finds entropy using Shannon Entropy base calculation which has some limitation. In this paper, the authors introduce new methods for calculating entropy based on Renyi Entropy instead of Shannon Entropy. By applying new calculation method they build the most optimized tree. This decision tree helps to take the decision for better analysis of data.