I have a JCL like this :

//JOB1 JOB NOTIFY=&SYSUID
//STEP1 EXEC PGM=IEBGENER
//SYSPRINT DD SYSOUT=*
//SYSOUT DD SYSOUT=*
//DD1 DD DSN=input-dsn,DISP=SHR
//DD2 DD DSN=output-dsn,DISP=SHR
//STEP2 IF RC=0 THEN
//STEP3 EXEC PGM=abc
//STEP4 EXEC PGM=sdr
//STEP5 EXEC PGM=xyz
//STEP6 ELSE
//STEP7 EXEC PGM=pqr
// ENDIF

if a job abends at step5, then from where should it be restarted-since steps3,4,5 are within IF...THEN..ELSE conditions

You have to restart from STEP2 if the job abends at step5 because steps3,4,5 are within IF...THEN..ELSE condition.