Zinc (Zn) doped hematite (α-Fe₂O₃) nanoparticles with varying concentrations (pure, 2%, 4% and 6%) were synthesized via sol-gel method. The influence of divalent Zn ions on structural, optical and dielectric behavior of hematite were studied. X-ray diffraction (XRD) pattern of synthesized samples were indexed to rhombohedral R3c space group of hematite with 14–21 nm crystallite size. The lattice parameter (a and c) values increase upto Zn 4% and decrease afterwards. The surface morphology of prepared nanoparticles were explored using transmission electron microscopy (TEM). The band gap measured from Tauc’s plot, using UV-Vis spectroscopy, showed reduction in its values upto Zn 4% and the reverse trend was obtained in higher concentrations. The dielectric properties of pure and Zn doped hematite were investigated at room temperature and followed the same trends as that of XRD parameters and band gap. Photocatalytic properties of nanoparticles were performed for hazardous Rose bengal dye and showed effective degradation in the presence of UV light. Hence, Zn²⁺ doped hematite can be considered as an efficient material for the potential applications in the domain of photocatalysis and also higher value of dielectric constant at room temperature makes them applicable in high energy storage devices.