The bus went out of control and plunged into the river in Lam, 17 km from Noushera town of Rajouri district.
A police officer said six passengers of the ill-fated bus managed to survive, while 40 people were washed away in the swollen river.
An operation has been launched to trace the bodies. Disaster management teams have rushed to the site.
Union Home Minister Rajnath Singh spoke to Chief Minister Omar Abdullah about the overall flood situation in the state and the Rajouri accident. Rajnath Singh, however, cancelled his scheduled visit to the state Friday.
The central government has promised all possible help to the state to meet the challenges posed by the unprecedented flood situation.
(With IANS inputs)