Federal Environment Secretary K. C. Mishra was forced to step down after the Central Bureau of Investigation (CBI) accused him of tampering with papers linked to a probe into the scandal, the Press Trust of India reported.
India's Supreme Court, which is monitoring the probe into the scandal, has said that some documents relating to the halted construction appeared to have been changed to alter their meaning by unidentified people.
The scandal regarding the Taj Mahal, in northern Uttar Pradesh state, is said to have caused the recent collapse of the coalition government of provincial chief minister Mayawati who like many Indians has one name.
Mishra was ordered out a day after the CBI submitted its report to the Supreme Court, which is determined to get to the bottom of the scandal which the CBI believes involves senior officials and politicians.
The court Thursday also ordered the CBI to assess within a week the personal wealth of four people linked to the multi-million-dollar project which Mayawati and top state government bureaucrats say they did not endorse.
The apex court, however, did not disclose the names of the four people it wants to be investigated by the federal police agency.
The CBI and the court suspect that officials cleared the controversial project near the 17th-century monument, a world heritage site, in return for huge bribes.
The Supreme Court halted the project in July following public outcry, with conservationists equating it with the destruction of ancient statues of Buddha in Afghanistan's Bamiyan province in 2001 by that country's former Islamic Taliban rulers.
After the planned construction became public, the Uttar Pradesh and federal governments both denied giving it clearance.
The Taj Mahal was built by the heart-broken Moghul emperor Shah Jehan in memory of his beloved second wife who died during childbirth.
More than 10,000 artisans toiled for two decades to construct the mausoleum, which is visited by hundreds of thousands of people each year.