Is it necessary to remove Talit Katan before using bathroom??

No, it is not necessary. It is permitted to enter into a lavatory wearing a garment that has Tzitzit (Shulchan Aruch Orach Chaim 21, 3). This only applies with respect to the small four cornered Talitot which one wears all day, but as regards the Mitzvah Talitot which are assigned for prayer only, it is not proper to enter a lavatory wearing them. However, it is permitted to urinate when one is wearing them (Mishnah Berurah ibid 14).