I'm from India; in our office we refer toilet to 'Wash-room' and 'Rest-room', which is the correct form to use and if there is a difference, what is the difference between the two words?
I would either use two words or one (rest room or restroom), but I wouldn't use a hyphen with either.
I think either restroom or washroom could be used. In the U.S., bathroom is also used, even if there is no tub or shower in the room.
Someone might be inclined to use washroom instead of restroom or bathroom if they were only going in to wash their hands, but that's only a technicality that you might hear on occasion, not a fixed rule that should be applied or assumed.
There's also the term powder room, which would only be used for ladies. I believe the term is out of vogue now.
This Ngram shows that "bathroom" is a rather prevalent term. I'm not surprised; it's the choice I would probably use most of the time.
This Ngram shows how often all the rest of the terms are used – although this data is taken from a written corpus and therefore may not accurately reflect how natives generally speak.
If the room only has sinks for washing, it's a washroom. If it has toilets, it's a restroom. If the room is in your home, it's a bathroom. Here's an odd idiom of the US. If someone asks, "May I use your bathroom," the person is asking to use the room to eliminate, not to bathe. So, a room in the home with a toilet & sink is called a bathroom, even if it lacks a tub or shower.
The word we use for the room in which we evacuate our bowels and bladders depends very much on the culture we happen to be in. There is no definitive answer to your question.
In Canada, the term for the room with the toilet is a "washroom." In the United States, it's generally "restroom" or "bathroom," though people generally understand if you say "washroom."
In the United States, signs in stores that show you where you can use the toilet almost universally use the term "Restroom."