In this article, we have computationally analyzed the Type-I InGaAsN/GaAs (dilute N) material system based step-index separately confined heterostructure (STINSCH) consisting of a compressively strained single quantum well layer. The whole structure is assumed to be grown on GaAs substrate. The optical gain spectra have been calculated and compared for single quantum well structure for the two different carrier densities under TE and TM polarization modes at room temperature. The size of the STINSCH based nano-scale heterostructure taken as a whole including SQW together with barriers and claddings is 47nm. In order to validate the computed optical gain, the anti-guiding factor has also been evaluated for the same nano-heterostructure. The GAIN software package has been utilized to obtain the various lasing properties like optical gain, modal gain, and anti-guiding factor. Therefore, this lasing nano-heterostructure may found application in optical fiber communication systems as a light source because of less attenuation and minimum optical loss. Copyright © 2018 VBRI Press.