I was wondering whether it is possible to send mass email based on tag. Right now we can select group only. So is it possible to send email based on tag? Is there any extension for that?
You can always search for contacts (e.g. contacts with certain tags) and then send an email / mass mailing to all the contacts via CiviMail. Technically CiviCRM would then create a "hidden group" to do that.
However, it is usually preferable to use groups to manage your mailing recipients in order to ensure that contacts can properly unsubscribe from your lists.
Maybe you could change the tags you currently use to groups?