The passengers had gone to Mussoorie along with their family members for the New Year celebrations, Senior Superintendent of Police G S Martolia said. Twenty two people were killed, he said.
He said the mishap occurred when the bus, going to Haridwar from Mussoorie, skidded off the road near a Shiva temple in the area and fell into 50-feet-deep gorge.
Most of the victims died on the spot, he said, adding that the injured were taken to Doon government hospital.
Senior police officials rushed to the spot to launch rescue operations.
"We are providing the best medical care to the injured," an official spokesman said.
Uttarakhand Chief Minister Ramesh Pokhriyal Nishank announced a compensation of Rs one lakh to the next of the kin of the deceased.