While four persons died on the spot, one succumbed to injuries in a government hospital, Sub Divisional Officer (SDO) Rajesh Kumar said.
Occupants of the car were returning from a marriage ceremony in Safiganj and the vehicle got entangled with the engine of the Gaya-bound train while trying to cross over the tracks unaware of arrival of the train.
Chief Minister Jitan Ram Manjhi has announced Rs 2.5 lakh compensation for the dependents of those killed in the collision.
The Chief Minister spoke to Nawada District Magistrate Lallan jee and directed him to facilitate free treatment of the injured, the CMO said.
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The Railways have not announced compensation saying that since the crossing was unauthorised, the Railways were not at fault, Chief Public Relation Officer(CPRO) Arvind Kumar Rajak said.
The accident took place at an unauthorised crossing through which vehicles and pedestrians cross the railway tracks in between Warsaliganj and Nawada, Rajak said.
Movement of trains has been suspended following the accident.
Additional Divisional Railway Manager (ADRM) Bipin Kumar Singh told PTI that Railway personnel from Gaya have reached the spot to remove the vehicle. But due to agitation by locals work was being delayed, he said.
Rajak said it was an unauthorised crossing and no warning signs which are otherwise present at railway crossings were there.
Locals have been agitating on the spot demanding compensation and railway crossing at the place.