Dfyjkt

We are going to Taiwan via Singapore.

We are booking a flight of air asia with

XT-853 and AK 721

22:50
(BOM)
06:30
(KUL)
+1
19:45
(KUL)
20:50
(SIN)

We had queries

1. Will we be eligible for TWOV as we have Taiwan Visa?




2. Can we depart from the airport and roam in the city as we have 12 hours layover with TWOV Pass?

According to Timatic, you can transit without a visa.

NOTE: This contradicts George Y's answer, and his source seems ligitimate. I'm not sure which is correct.

I also assume that you're an Indian national, although you didn't explicit

A Timatic search on the Emirates site says:

TWOV (Transit Without Visa): Holders of onward tickets for a max.
transit time of 24 hours, arriving at and departing from Kuala Lumpur
(KUL).

- Transit without a visa is not possible between Main Terminal and KLIA2.

Holders of a valid visa issued by Australia, China
(People's Rep.), Chinese Taipei, Japan, Korea (Rep.), New Zealand or
USA to nationals of India residing in India holding confirmed onward
tickets for a max. transit time of 120 hours, arriving at and
departing from Kuala Lumpur (KUL) on Malaysia Airlines (MH) or Air
Asia (AK). When transit time is longer than 8 hours it is permitted to
leave the transit area if:
- traveling to or returning from the country which issued the visa; and
- traveling on a tour/package arranged by a company registered in the country which issued the visa.

- Transit between Main Terminal and KLIA2
is also permitted. When leaving the airport transit area, passports
must be valid for at least 6 months from date of arrival.

The first paragraph is applicable to you. It doesn't allow you to leave the ariport or switch between Main Terminal and KLIA2, but both your flights are on KLIA2, so it's OK.

The second paragraph is applicable if you fly Malasiya Airlines (MH) or Air Asia (AK). Your outgoing flight is Indonesia Air Asia X, so it's probably not applicable. If it was, it would allow you to leave the airport.

Assuming your citizenship is Indian, it seems like you're not eligible for TWOV (TWOV means "Transit WithOut Visa"):

Posses a valid onward ticket and carry a Single Entry Visa (SEV) or
Multiple Entry Visa (MEV) issued from/and are heading to any one (1)
of the seven (7) countries listed below:

Australia
New Zealand
United States of America (USA)
Japan
China
Taiwan
South Korea

*TWOV will not be issued if next country of destination is not listed as above.

You have Taiwanese visa, but since you're not flying to Taiwan it looks like you're not eligible for TWOV.

Interestingly if you were flying the other way, you'd be eligible for Visa on Arrival:

Nationals of eligible countries arriving from Thailand or Singapore
with a valid visa from their respective countries

The official government site seems to offer similar opinion although worded it differently:

5. TWOV cannot be offered to passenger sponsored by airlines other than Malaysia Airlines and Air Asia. At present only MAS and Air
   Asia have agreed and accepted all terms and conditions imposed by the
   Malaysian Government.