While there are lots of cases of actual "toxic" environments or bosses, there are also lots of other reasons why things become toxic. The problem is, it's hard for an interviewer to determine if you called the prior environment "toxic" because:
- It actually was toxic, which they couldn't really hold against you,
- There was some sort of mismatch on soft factors (ie fit, style, etc) which might or might not really be a problem (depending on if the same mismatch would occur at the new employer), or
- Because the employee was the toxic one - problematic employees don't usually say "I left because I'm toxic"
To get to the root of your question: Saying you left a job because it was toxic - or even a softer version of that sentence - is bad practice because it leaves doubt in the interviewer's mind as to which of these three scenarios was actually the truth. They are left wondering - was the environment really toxic, or was the employee toxic? Will this person soon cause problems here, and then blame those problems on us? And so on. Obviously, you don't want that to happen.
In that context, let's look at your actual questions:
should i state my reason to leave as no room to grow or should i say i left due to family issue as i worry about future employers doing background checks with previous employers and find that the reason for leaving differs
Rule number one in the interview process is, be honest. You don't always have to be literally honest in a detailed manner about every single factor, but you generally shouldn't be broadly dishonest. In other words, don't continue the story about family issues. You're concerned about background checks revealing a mismatch - when an employer does a background check, they're not out to corroborate the reason you gave for leaving a past employer, they're just out to validate that you were actually employed for the date range you gave.
That leads to your real question:
And if i should state the real reason instead which i think i should, how should i phrase it such that i don't sound like i'm bad mouthing them?
@user had a great suggestion in comments on another answer. To paraphrase: Be honest, but also be ready to turn a bad situation into something positive. Besides the basic value of honesty, employers really like candidates who can turn a challenge into a growing experience - or who can learn from failure - rather than employees who don't bother to try to understand challenges and just move on to something else.
You don't need to have a pages-long monologue prepared, but it makes sense to have two or three specific, brief "stories" ready in your head - a few sentences each - where you can describe a factor that challenged you in your past employer and why that helped you grow (looking for a new job somewhere else is a type of growing). Then, when you get asked the question of, "why did you leave?" you can give a general high level summary, and add one of your stories. If they probe further, you've got some backup material ready with your other stories, too.
At the risk of putting words in your mouth, let's look at the last sentence of your first paragraph and rephrase it to fit this approach:
Team members were not supportive of one another as individual sales credits meant more to them and there was simply no chemistry with my team members which left me miserable.
When asked, "Why did you leave?" you could respond with something along the lines of,
At my last employer, I found that the team dynamic wasn't a good fit for me. While I enjoy a competitive sales environment, I also find that I am able to contribute the most when team members support and collaborate with each other. That allows me to add value to others' sales, versus just being out for my own numbers. I'm looking forward to an opportunity to work on a sales team that understands that the whole is more than the sum of the parts.
Instead of coming across as a risk (someone who might not get along well with team members) you're now coming across as an asset (someone who is driven for their own numbers but also willing to help others). And that's exactly the impression you want to give, because it's honest, it shows the value you're bringing to the table, and it shows you're able to learn.