Rare-earth oxides are paramagnetic materials and their high magnetic susceptibility in the bulk makes them potentially promising materials, but the magnetic properties of their nanoparticles remain incompletely characterized. We explore the effect of dopant (Tb3+ and Eu3+) in Gd2O3 host lattice as a heating agent for magnetic hyperthermia application. The structural, optical, and magnetic properties of the pristine, Gd2O3:Tb3+ and Gd2O3:Eu3+ nanocrystals were studied by XRD, HR-TEM, FTIR, and VSM. XRD analysis revealed the presence of mixed-phase (cubic and monoclinic) in pristine, and doped Gd2O3 nanoparticles. The morphological information has been observed with the help of HRTEM and the calculated inter-planar spacing is in well agreement with JCPDS data. Particles are nearly spherical and diameter ∼15 nm, estimated from HRTEM image. FTIR spectroscopic analysis confirms the presence of Gd-O-Gd stretching at 583cm−1. We confirmed the paramagnetic nature for all samples using VSM analysis. The self-heating capability of prepared samples are investigated by performing the induction heating experiment and it is assessed through calculated SAR and ILP values with help of Box-Lucas fitting model where 10% Tb3+ doped Gd2O3 has maximum values.