Polycrystalline BiFeO3 and Bi0.85Sm0.15Fe0.90Sc0.10O3 compounds were synthesized by conventional solid state route. X-Ray diffraction measurements revealed that the co-substitution of Sm and Sc in BiFeO3 induced a structural transformation from R3c rhombohedral to orthorhombic structure with Pnma space group. The temperature variation of dielectric measurements confirmed the presence of magnetoelectric coupling in the compounds. The suppression of anomaly near 220 °C and a decrease in dielectric constant in the co-substituted compound was observed. Complex impedance studies revealed that grain and grain boundary resistances were improved and ac conductivity was decreased in the co-substituted compound. The temperature dependence of ac conductivity was consistent with correlated barrier hopping model. © 2018 Author(s).