Multiferroic Bi0.9Ca0.1Fe0.9Hf0.1O3 nanoparticles was synthesised by using sol–gel technique. The formation of the compound is examined using X-ray diffraction pattern and then verified by Rietveld refinement with FULLPROF software. FTIR spectra confirms the existence of metal–oxygen bands which confirms the creation of a perovskite structure. With increasing frequency, there is a drop in dielectric permittivity (ε) and tangent loss (tanδ), which can be explained by the dipolar relaxation phenomena. With respect to rising temperature, dielectric permittivity is increasing, exhibiting dielectric anomalies (like a hump) at a particular region, these anomalies get diminished in tangent loss. Additionally, the synthesised sample also displays a strong magneto-dielectric (MD) effect with applied magnetic field (0 T to 1 T). Synthesized sample’s band gap (Eg) absorption was calculated using the Tauc’s formula, and it was reduced as compared with the pure BFO sample. Strong MD coupling and reduced band gap makes it prominent candidate for magneto-dielectric and optoelectronic devices.