This work addresses the effect of substituting Mn3+ by Fe3+ at the octahedral site of TbMnO3 on the magnetic phase sequence, ferroelectric and magnetoelectric properties, keeping the Fe3+ concentration below 5%. The temperature dependence of the specific heat, dielectric permittivity and electric polarization was studied as a function of Fe3+ concentration and applied magnetic field. From the experimental results a strong decrease of the electric polarization with increasing Fe3+ substitution is observed, vanishing above a concentration of 4%. However, within this range, a significant increase of the magnetic sensitivity of the electric polarization is obtained by increasing Fe3+ concentration. For Fe3+ concentration above 4%, a non-polar phase emerges, whose spin structure prevents ferroelectricity according to the Dzyaloshinskii-Moriya model. The experimental results here reported reveal the crucial effect of B-site substitution on the magnetic phase sequence, as well as, on the polar and magnetoelectric properties, evidencing the important role played by the eg electrons on the stabilization of the magnetic structures that are suitable for the emergence of electric polarization.