@lalitk No need for Atmos. Toslink is pretty old technology I assume ARC and eARC can send even 2 channel stereo pcm at a higher bit rate to the dac.
eARC has a bandwidth of 37Mbps where toslink is only 384kbps
https://www.avaccess.com/blogs/guides/difference-between-hdmi-arc-and-earc/