The present study demonstrates the reduction in the dielectric loss at room temperature from 0.149 to 0.027 in the composite of (NdFeO3)(0.1)-(Ba0.7Sr0.3TiO3)(0.9) as compared to the undoped Ba0.7Sr0.3TiO3 and correlates with the charge compensation due to the ionic substitutions for both A site (Nd-Ba) and B (Fe-Ti) site generated excess electrons, localized hole states and robust oxygen vacancies (V-O) along with different cationic oxidation states. The V-O mediated F center charge transfer mechanism i.e., bound magnetic polaronic behaviour and defect complex generated between acceptors and ionized V-O reduce electrical conductivity and loss factor. The presence of weak ferromagnetism in the M-H loop reconfirms the F center exchange mechanism in mixed phase symmetry. The activation energy calculated from impedance spectroscopy, electrical modulus and electrical conductivity analysis supports the presence of doubly ionized V-O. Further, density functional theory based first principle calculation manifests that the impurity induced depopulation of valence band edge electrons into a single spin up channel which distorts TiO6 octahedra with fluctuating bond length and Ti 3d e(g) orbital splitting observed in decomposed density of states for accommodating excess electrons. These trapped and accommodated electrons reduce the effective electron concentration which in turn decreases the electrical conductivity and loss factor.