Enhancement of multiferroic properties of bismuth ferrite (BFO) is a real challenge to the scientific community. We are able to achieve improved magnetic and electric properties in chemically prepared nanocrystalline BFO by virtue of the beneficial effect of Y and Mn codoping. Phase purity and nanocrystalline nature of the samples have been confirmed using X-ray diffractometer and transmission electron microscope. The decrease in oxygen vacancies, local ferromagnetic spin configuration, and breaking of spin cycloid due to smaller size of crystallites are instrumental behind the enhancement of multiferroic properties. Large magnetodielectric coefficient (5.8 % at 1.5 T) for 1Y1Mn combination is observed at room temperature due to enhance coupling between ferromagnetic and ferroelectric ordering achieved by Y and Mn co-doping. We are able to achieve highest saturation magnetization, resistivity, dielectric constant, and lowest dielectric loss in 1Y1Mn co-doped samples compared with both pure BFO and with the other single or co-doped BFO. Our results demonstrate that the co-doping is an effective way to rectify various issues relevant for device applications.