At least five people, including the driver, were injured on Tuesday when the engine and two coaches of the toy train derailed in Darjeeling district.
The injured have been admitted to Kurseong hospital. Earlier reports said 10 persons had been injured.
A railway official said heavy rainfall in the hills could have caused the mishap.
The Darjeeling Himalayan Railways (DHR) toy train, a UNESCO world heritage site, was going from Darjeeling to Siliguri when the accident occurred between Kurseong and Mahanadi around 3.25pm, North East frontier railway officials said.
DHR director T Bhutia said the wheels of the diesel loco jumped the tracks while passing a turn near Paglajhora and two coaches derailed thereafter.
The passengers were sent to their destination by road from Kurseong, which is around 32 km from Darjeeling town.
Railway engineers reached the spot to ascertain the cause of the accident, he said.