Surface modification of inorganic nanomaterials using different ions is well-known to induce significant modulation in functionality of the nanoparticles (NP), which improves tuning their relevant properties for suitable applications in the field of nanotechnology. Here, we report synthesis and surface modification of a model inorganic wide bandgap semiconductor ZnO NP by halide ions by simple precipitation method and demonstrate that proximity of various halide ions to the NP modifies their electronic properties. It is interesting to note that such surface modulation has little impact on its morphology,while significantly influencing their applications in photocatalytic activity or magnetism. Indeed, the halide attached ZnO NP displays a large reduction of defect state emission. Various microscopic and spectroscopic tools (including picosecond resolved technique) were used to characterize and understand the key role of the halide ions to modulate the light induced charge separation in ZnO NP. Picosecond resolved fluorescence spectra unveil a significant quenching, implying an electronic cross-talking between the NP and the attached halide ions.Magnetic measurements indicate that attachment of a suitable halide ion introduces room temperature ferromagnetism in this system. Finally, the photocatalytic activity of the ZnO NP for the photodegradation of a model pollutant, methyl orange was evaluated under UV light irradiation. Halide ZnO is anticipated to be a very promising photocatalytic agent; hence it can be used to cleanup environmental pollution. First principles analysis has been performed to understand the modulation of electronic properties like photocatalysis and magnetism in halide attached nanosystem. The experimental behavior resembles nicely with theoretical results.