The undoped and Ca‐doped BiFeO3 nanoparticles of different particle size were synthesised using sol‐gel. Ca‐doping induced structural transformation from rhombohedral to orthorhombic phase along with reduced crystallite size due to its smaller ionic radii. Morphological analysis showed increase in particle size from 11 to 50 nm on increasing calcination temperature from 450 to 650 °C. Magnetic and electrical studies revealed enhancement in magnetism as well as dielectric constant and polarisation values with Ca‐doping. When the particle size of Ca‐doped BiFeO3 nanoparticles was further reduced, these values registered remarkable enhancement. Thermal analysis revealed charge compensation mechanism to occur via formation of oxygen vacancies on doping of Ca2+ ions in BiFeO3 lattice. The decreasing dielectric constant values indicating increasing oxygen vacancies content with particle size also point towards the similar charge compensation mechanism in the particle size varied Ca‐doped BiFeO3 nanoparticles.