A comprehensive first-principles study on electronic structure of optimally doped \({\hbox {Ca}_{0.33}\hbox {Na}_{0.67}\hbox {Fe}_2\hbox {As}_2}\) under hydrostatic pressures in the presence of magnetic configurations is presented. A magneto-structural transition from a tetragonal to a collapsed tetragonal phase at 3 GPa hydrostatic pressure is predicted in double-stripe antiferromagnetic configuration that corroborates experimental observations. As the system enters the non-superconducting collapsed phase, significant deviations occur in the local structural parameters compared to those at optimal \({\it{T}}_{c}\) values. This transition coincides with a sharp decrease in As density of states (DOS), accompanied by Fe magnetic moment collapse and substantial Fe square plane charge density modification. The structural transition induces a comprehensive reconstruction of the electronic structure, marked by distorted \(\hbox {FeAs}_{4}\) tetrahedra, potentially leading to unfavourable nesting conditions, and complete suppression of magnetism, correlating with the observed disappearance of superconductivity. Increasing pressure leads to a rise in crystal field splitting, influencing the spin-state transition in \({\hbox {Ca}_{0.33}\hbox {Na}_{0.67}\hbox {Fe}_2\hbox {As}_2}\) , ultimately resulting in a shift from tetragonal to non-magnetic collapsed tetragonal phase as the \(\hbox {Fe}^{2+}\) spin state transitions to a low spin state. This demonstrates the intricate interplay between crystal field splitting, external pressure, and spin dynamics, highlighting the significant impact of magneto-volume effects on the structural phase of material under pressure.
