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The bus was going to Nizamabad from Nirmal when the accident occurred, police said.
The Gollapudi-Sitara junction stretch, peppered with potholes of varying sizes, is a death trap for drivers.
The incident happened after the private bus hit a crash barrier that prevented it from falling into a gorge at Luna vilage in Bharmour, around 420 km from Shimla.
The accident occurred around 2.10 pm when the driver lost control over the vehicle which rolled down into an over 150-feet-deep gorge.
Iran has one of the highest road death rates in the world, with health ministry officials reporting around 16,300 killed in the Iranian year that ended in March and a further 336,000 injured.
State television aired footage of firefighters battling the blaze as emergency crews rushed to take the wounded to nearby hospitals.
As motorists violate one-ways intentionally, along with a penalty of Rs 100, they are fined for negligence at Rs 1,000 under the Motor Vehicles Act.
The driver and the owner of the vehicle were among those injured and their condition was stated to be serious, a police official said.
The increasing number of people losing their lives in road accidents has raised a big question on the safety of the roads in the state.
The official said the trio were critically injured and were rushed to a nearby hospital where they were declared brought dead.
The accident took place in Bijinapally in Nagarkurnool district, on Sunday morning, when one of the tyres of the bus exploded.
In a freak accident, a motorist who was filling fuel in his bike at a petrol pump was killed after a truck crane ran over him near the Town Hall on Banerji road, on Thursday night.
Ever since the fatal bus accident in Kondagattu that killed 61 people, TSRTC has been facing the public ire from across the sections of society.
Immediately after the accident, locals, police and Army men rushed to the area to rescue the injured and shift them to hospitals.
A road rage ended in a gruesome tragedy for a motorcyclist when he was pushed down during a quarrel with other motorists and a lorry ran over him at Chembarambakkam on Wednesday.