The statement that "The social classification of Varna was known to Sangam poets" is correct because Sangam literature, which thrived in ancient Tamil Nadu during the early centuries of the Common Era, reflects the societal structures, including social hierarchies and classifications prevalent in that period. The poets often referenced the Varna system, illustrating the roles and duties associated with different social classes, thereby emphasizing the integration of complex social dynamics in their works. This understanding of societal organization is crucial for comprehending the cultural and historical context of South India during the Sangam period, which is often examined in UPSC Prelims for insights into India's ancient civilizations.