How can we shrink temp tablespace in oracle? And why it is increasing so much like upto 25 GB since there is only one schema in the database for the application and data tab
You should have written what version of Oracle you use. You most likely use something else than Oracle 11g, that's why you can't shrink a temp tablespace.
Alternatives:
1) alter database tempfile '[your_file]' resize 128M; which will probably fail
2) Drop and recreate the tablespace. If the temporary tablespace you want to shrink is your default temporary tablespace, you may have to first create a new temporary tablespace, set it as the default temporary tablespace then drop your old default temporary tablespace and recreate it. Afterwards drop the second temporary table created.
3) For Oracle 9i and higher you could just drop the tempfile(s) and add a new one(s)
Everything is described here in great detail.
See this link: http://databaseguide.blogspot.com/2008/06/resizing-temporary-tablespace.html
It was already linked, but maybe you missed it, so here it is again.