What Is RAC in Indian Railways? Know rules, benefits and latest changes

RAC stands for Reservation Against Cancellation. It is a unique ticketing system on the Indian Railways that allows passengers to travel even when all confirmed berths are booked, but does not guarantee a full berth at the time of booking.Instead, an RAC ticket ensures you can board the train and have a seat, typically by sharing a berth with another RAC passenger. But now, this rule is set to change. RAC passengers can now get a separate seat, with no need to share.advertisementWHAT IS RAC, AND WHY DOES IT MATTER?When you book a ticket and all berths are already taken, Indian Railways issues an RAC ticket.
This means you're not on the waitlist -- you're assured of travel, usually with a seat shared on a side-lower berth. RAC offers peace of mind for travellers who can't afford to miss their journey.HOW THE SYSTEM WORKSTwo RAC ticket holders typically share one side-lower berth. If other passengers cancel or unused berths free up, one RAC passenger is upgraded to a full berth while the other continues sharing. RAC status is dynamic and can improve as the departure date nears (e.g., RAC8 RAC2).In a major change, Indian Railways now guarantees separate seats for all RAC passengers, eliminating the need to share. This upgrade applies to all trains and classes where RAC is issued. The result: more comfort, less confusion, and a better travel experience -- especially during peak seasons.SEAT SHARING RULES AND ALLOCATION GUIDELINESadvertisementTraditionally, RAC meant sharing a seat during the day and a berth at nightWith new rules, sharing is minimised, and upgrades happen as berths openOfficial sleeping hours are 10 pm to 6 am -- upper berth passengers may sit on lower berths only during the dayThe RAC quota per coach ranges from 12 to 14 seats, depending on coach type (ICF or LHB)Around 6-7 side-lower berths per coach are designated for the RACThis allows for at least a dozen RAC passengers per coach, with real-time movement on the upgrade listCANCELLATION, REFUNDS, AND UPGRADE PATHRAC tickets can be cancelled for a small feeIf upgraded before or during travel, the passenger receives a full berthIf not upgraded, the seat is still confirmed for the entire journeyBENEFITS OF BOOKING A RAC TICKETGuaranteed travel: Unlike waitlisted passengers, RAC ticket holders are never denied boarding.Potential upgrade: Many RAC passengers are upgraded automatically as others cancel.Better than waitlist: RAC is the safer bet for urgent or long-distance travel.LIMITATIONS TO KEEP IN MINDNo full berth guarantee: Sharing is still possible unless upgradedNo fare discount: RAC passengers pay the same fare as confirmed ticket holdersTime-bound cancellation rules: Refunds and changes must follow IRCTC policies and deadlinesWith every RAC passenger now entitled to an individual seat, this ticketing system has become more user-friendly than ever. Whether you're on a tight schedule or just want a backup plan when trains are full, RAC offers a dependable solution that combines flexibility with fairness.Must Watch

Try Our AI Features

Explore what Daily8 AI can do for you:

Learn with AIFact CheckingText to SpeechAI Summary

Related Articles

Indian Express

a day ago

• Indian Express

Can IRCTC keep delivering? Inside India's most unique listed business

In 2019, the IRCTC IPO was subscribed 112 times. From seasoned investors to first-time ones, everyone was talking about it. And with good reason. It was a rare play on Indian Railways, had monopoly-like traits, and the listing pop only added to the hype. The stock doubled on Day 1 and kept going up. For many, it felt like a once-in-a-decade kind of opportunity. But things changed pretty quickly after that. There were regulatory curveballs, a few government flip-flops (remember the convenience fee saga?), and then Covid brought the entire railway network to a standstill. Naturally, the stock took a beating. What started as a dream run turned bumpy and unpredictable. That said, if you zoom out and look at the bigger picture, it is still a solid story. From its IPO price of ~ Rs 60 (adjusted for stock split) to where it stands now, IRCTC has delivered over 50% CAGR since IPO. Not many companies with that kind of volatility and dependence on a single ecosystem can claim that kind of performance. So yes, the euphoria may have faded. But the business itself? It has evolved. And in some areas, quietly grown stronger. Let us dive in and see what has really changed and what that means for investors. At first, IRCTC may seem like a straightforward business involved in train ticket bookings and catering. But it is actually a multi-segment operation with very different drivers, margins, and growth paths. IRCTC operates in four key segments: Internet Ticketing Catering Services Rail Neer (Packaged Drinking Water) Tourism and Travel Services Let us understand each one with data and context from FY25. This is IRCTC's most profitable segment by far. In FY25, it earned Rs 1,426 crore in revenue from ticketing. That is just 31% of total revenue, but it contributed over 75% of operating profit. Why does this segment punch so far above its weight? The answer lies in the convenience fee. Every time you book a train ticket on IRCTC, you pay a small fee. It may not feel like much individually, but when over 50 crore tickets get booked in a year, those small amounts add up big time. IRCTC does not own the trains or the inventory, but the tech layer on top of Indian Railways. That means very low operating costs, high margins, and strong cash flows. The EBITDA margin in this segment is a solid over 80%. In FY25, the company also processed around 14 lakh ticketing transactions per day, making it one of the busiest travel platforms in the country. Catering is IRCTC's largest revenue segment. In FY25, it brought in Rs 2,125 crore, almost 45% of the total revenue. This includes both onboard meals and station-based catering units. But here is the catch. While the revenue is large, margins are thin. The EBITDA margin in this segment remains healthy, at around 12%. Why? Because this is a labour- and logistics-heavy business. You need kitchen infrastructure, staff, raw materials, quality checks, and distribution across thousands of stations and coaches. Add compliance and vendor management, and the complexity rises. The company is now trying to improve margins through e-catering (food delivered to your train seat from external restaurants) and more premium offerings, but it is a work in progress. Rail Neer is IRCTC's packaged drinking water brand, available at major stations and in trains. In FY25, it contributed Rs 394 crore to revenue, just around 8% overall, but it is a high-potential business with decent margins at 12% EBITDA. Why is this interesting? Because IRCTC has a strong distribution advantage. Indian Railways gives it priority access at stations, and the company is expanding its plant capacity rapidly. From 15 plants in FY24, it now operates 20, with more in the pipeline. This is a low-ticket but high-volume business. If IRCTC continues to expand and push Rail Neer even in tier-2 and tier-3 locations, the growth can be meaningful over time. The tourism segment is the fastest margin-growing today, with revenue of Rs 744 crore in FY25. This business has strategic importance. This includes domestic and international tour packages, special trains, Bharat Gaurav tourist circuits, and chartered train services. Margins are about 13%, not very high yet, but this is a leveraged segment. If IRCTC gets better at curating high-margin tours, especially in the luxury or spiritual travel space, this segment could surprise in the next 3-5 years. One big positive is the Bharat Gaurav trains, which are aimed at religious tourism. Demand here is growing fast, and IRCTC is among the few players with the required approvals, inventory access, and experience to scale this up efficiently. Segment Revenue (₹ Cr) in FY 25 EBITDA Margin (%) in FY25 Revenue (₹ Cr) in FY24 EBITDA Margin (%) in FY24 % Growth in Revenue Internet Ticketing 1,426 ~82% 1,295 82% ~10% Catering 2,125 ~13% 1,947 ~13% ~9% Rail Neer 394 ~12% 340 ~8% ~16% Tourism & Travel 744 ~13% 691 ~3% ~8% Total 4,674 – 4,260 – IRCTC ended FY25 with revenue of Rs 4,674 crore, growing ~10% year-over-year, and a net profit of Rs 1,314 crore, up nearly 19%. With EBITDA margins of 33%, zero long-term debt, and nearly Rs 2,000 crore in cash reserves, IRCTC is in a strong operational position. That said, the real question is, where does it go from here? IRCTC's recent disclosures point to three focused areas where the company is actively investing resources and seeing steady progress. These are segments where the company has operational control, demand visibility, and regulatory clarity. Catering remains the largest part of IRCTC's business, contributing over Rs 2,100 crore in FY25. It includes on-board services, base kitchens, station vending, and a growing e-catering channel. E-catering continues to expand across major stations and trains. In FY25, the company served over 2.5 crore meals through e-catering, a solid growth of over 50% compared to the previous year. This is helping improve food variety and passenger experience, especially through tie-ups with well-known brands. Rail Neer, IRCTC's packaged water business, added scale as well. With 40 crore bottles sold in FY25, the business grew over 15% year-over-year. The company currently operates 15 bottling plants and has three more in the pipeline to support growing demand from newer routes and higher passenger volumes. Both businesses benefit from IRCTC's established supply chain and access to railway infrastructure, and continue to show potential for moderate volume-led growth. During the management conference call, the company highlighted that state governments and public sector undertakings continue to be a significant growth driver in the tourism business. This includes group tours, spiritual packages, and Bharat Gaurav trains, where IRCTC not only runs the trains but also handles food, accommodation, and complete itineraries. IRCTC mentioned it had conducted a large number of tour departures and that demand remains robust in the institutional segment. This helps the company maintain predictable booking volumes and supports revenue consistency in the tourism vertical. What stood out in the recent calls was the focus on new initiatives, but there was also a clear emphasis on reinforcing what already works. IRCTC did not speak about entering new lines of business or platform monetisation. Instead, the discussion stayed grounded in strengthening established segments like Rail Neer and government-driven tourism. This signals a cautious but deliberate strategy, one that leans on demand visibility, execution history, and operational scale. While this may limit near-term upside surprises, it also reduces the risk of capital misallocation or overreach. The current roadmap, as described by management, is structured around expanding throughput, rather than chasing high-risk opportunities. At around Rs 60,000 crore in market cap, IRCTC trades at roughly 46 times FY25 earnings. On the surface, this looks expensive for a company growing earnings at 15-20%. But the market seems to value it for its predictability, cash efficiency, and platform-like economics in ticketing. The stock is unlikely to see a rapid re-rating from here, unless there is a meaningful change in business mix or monetisation. That said, even if the multiple gradually tapers to 35-40x and earnings continue to grow, long-term investors could still see decent wealth creation, especially through dividends, capital protection, and lower volatility compared to high-growth names. What keeps this valuation stable is the moat IRCTC enjoys in its core business. What could test it is regulatory unpredictability or poor execution in scaling the other segments. While it may not offer a sharp upside from here, IRCTC still stands out as one of the few listed businesses in India that combines digital scale, government backing, and consistent profitability. Note: This article relies on data from annual and industry reports. We have used our assumptions for forecasting. Parth Parikh has over a decade of experience in finance and research and currently heads the growth and content vertical at Finsire. He holds an FRM Charter and an MBA in Finance from Narsee Monjee Institute of Management Studies. Disclosure: The writer and his dependents do not hold the stocks discussed in this article. The website managers, its employee(s), and contributors/writers/authors of articles have or may have an outstanding buy or sell position or holding in the securities, options on securities or other related investments of issuers and/or companies discussed therein. The content of the articles and the interpretation of data are solely the personal views of the contributors/ writers/authors. Investors must make their own investment decisions based on their specific objectives, resources and only after consulting such independent advisors as may be necessary.

India.com

2 days ago

• India.com

Indian Railways Ticketing rules: These passengers can book train tickets for 365 days in advance, condition is to...

Tatkal ticket booking rules- Image for representational purpose IRCTC ticket booking process: The Indian Railways recently made several changes to its tatkal ticket booking rules under which it made tatkal ticket booking a lot easier for common people of India. However, talking about advance reservation, the Indian Railways recently made significant change to its ticketing policy. As per the advance ticket booking rules, the IRCTC has reduced the advance reservation period (ARP) for train tickets from 120 days to now 60 days. However, do you know about the rule which allows commuters to book train tickets 120 days prior. As per the rules of IRCTC mentioned on the website, Foreign Tourists (including NRIs) holding valid passport can avail Foreign Tourist Quota facility to book railway tickets upto 365 days in advance online using IRCTC eTicketing website within the current Advance Reservation Period (ARP). Readers should note that within current Advance Reservation Period (ARP), berths are allocated at the time of booking and the users will be notified about berth allocation through International SMS facility. Available classes of travel for Foreign Citizens Available classes of travel under Foreign Tourist Quota are Executive Class (EC), 1st AC (1A) , 2nd AC (2A), 3rd AC(3A), AC Chair Car (CC), Sleeper(SL) and Second Sitting(2S). Update on Tatkal ticket booking process In a significant update in the Tatkal ticket booking process, the Indian Railways Catering Service announced new rules for the commuters who face difficulties in booking Tatkal tickets. 'With effect from 01.07.2025, tickets under tatkal scheme can be booked through the website of Indian Railways Catering and Tourism Corporation (IRCTC)/its app only by Aadhaar authenticated users. Subsequently, Aadhaar-based OTP authentication shall also be made compulsory for the tatkal booking from 15.07.2025,' reads the circular issued by the Railway Ministry on June 10. 'Tatkal tickets shall be available for booking through computerised PRS (passenger reservation system) counters of Indian Railways/authorised agents only after authentication of a system generated OTP which shall be sent through the system on the mobile number furnished by the user at the time of booking. This shall also be implemented by 15.07.2025,' said the circular further.

Mint

2 days ago

• Mint

How to link Aadhaar to IRCTC account for booking train Tatkal tickets from July 1? A step-by-step guide

From July 1, train passengers will not be able to book their train tickets without getting aadhaar authentication. A railway circular dated June 10 said that tickets under the Tatkal scheme can be booked through the website of Indian Railway Catering and Tourism Corporation (IRCTC) or its app only by Aadhaar authenticated users. In other words, if you want to do the tatkal booking, you need to first get the aadhaar authentication. From July 15 onwards, Aadhaar-based OTP authentication will also be made compulsory for Tatkal bookings. IRCTC is urging the users to link their Aadhaar details with their IRCTC accounts. This will streamline the process of booking train tickets. This verification is aimed to enhance security and convenience for travellers. 'Tatkal tickets shall be available for booking through computerised PRS (Passenger Reservation System) counters of Indian Railways/authorized agents only after authentication of a system-generated OTP, which shall be sent through the system on the mobile number furnished by the users at the time of booking. This shall also be implemented by 15/07/2025,' the ministry said in its notification. This is how you can follow the process. 1. Sign in to your IRCTC account. 2. Go to 'My Account' and select authenticate user. 3. Authenticate user page will appear where user's profile details will be populated. 4. You can now submit an Aadhaar number or virtual ID and click on verify details and receive the OTP button. 5. Now you can submit OTP received on a mobile number linked with submitted Aadhaar. 6. Read and select the consent checkbox and then click on submit button to authenticate the details with Aadhaar. 7. On successful authentication, a confirmation message will be displayed. 8. If there is unsuccessful authentication, an alert message will be displayed. In those cases, train ticket users are supposed to check the details again and try again. For all personal finance updates, visit here