Room temperature ferroelectric and magnetic properties of undoped BiFeO3 and (Nd, Co) codoped BiFeO3 are reported. The sol–gel synthesized Bi1−XNdXFe0.98Co0.02O3 (x = 0.01, 0.02, 0.03, 0.04, 0.05 and 0.06) ceramics were analysed by XRD pattern, Raman spectrum, X-ray photoelectron spectrum (XPS), ferroelectric loop and magnetic hysteresis loop. The evolution of the changes in the ferroelectric and magnetic properties with gradual tiny increase in the dopant concentration was investigated. XRD patterns and Raman spectra confirm the typical rhombohedral structure for all the samples. The oxidation states of Fe and the existence of oxygen vacancies studied through XPS reveal that enhanced ferroelectric properties of the doped samples are due to the presence of low Fe2+ ions and reduction of oxygen vacancies. The remnant polarisation and maximum polarisation values of Nd 1–5% doped samples are remarkably enhanced compared to BFO. The highest Nd doping 6% showed reduced ferroelectric parameters due to the internal strain caused by the high doping, which was illustrated by its Raman spectrum. Well saturated magnetic hysteresis loops are obtained due to the doping of Nd and Co with significant magnetic parameters. A notable simultaneous improvement in both magnetic and ferroelectric properties has been illustrated for 1–5% of Nd doping.