Hi Niveditha,
Unfortunately, you're correct. The only possibility to set notifications based on tags are for tag changes, but not for any specific value or narrower condition.
You probably will be able to do that if you use Webhooks. This mechanism is more flexible and you can specify pretty much any condition you need. However, it's more complex and it will require developing both the webhook itself , as well as the receiving part which shall parse the payload and send a notification if your conditions are met:
Manage Webhooks | CA Agile Central Help
With regards to the limitation in the Notification page: you may want to post an idea on this to our ideas site: https://ideas.rallydev.com asking to extend the capabilities to notify based on tags.
Let me know if that helps, if further quetisons.
Thanks,
Sagi