Dry ammonia has no action on litmus paper, but a solution of ammonia in water turns red litmus paper blue. Why?

Dry Ammonia Gas (NH₃)

In its dry, gaseous state, ammonia exists as neutral ammonia molecules (NH₃). There is no water present, so the ammonia cannot dissociate to form ions. Since there are no hydroxide ions (OH⁻) to give it a basic character, the dry gas has no effect on the color of the litmus paper.

Ammonia Solution in Water (Aqueous Ammonia)

When dry ammonia gas is dissolved in water, it reacts with the water molecules to form ammonium hydroxide (NH₄OH), which is a weak base. This new compound then partially ionizes in the water to produce ammonium ions (NH₄⁺) and hydroxide ions (OH⁻).

The chemical reaction is:

NH3 (Ammonia) + H2O (Water) ⇌ NH4OH (Ammonium Hydroxide) ⇌ NH4+ (Ammonium ion) + OH− (Hydroxide ion)

It is the presence of these free hydroxide ions (OH⁻) in the solution that makes it basic. These ions are responsible for turning the red litmus paper blue, indicating the basic nature of the solution.