The word karma has entered everyday language, usually meaning something like "what goes around comes around." While there is a grain of truth in this, the Vedāntic understanding of karma is more precise and more useful.

What karma means
Karma literally means "action." In Vedānta, it refers to: 1. Any action performed by body, speech, or mind 2. The result or consequence of that action 3. The accumulated impression (saṃskāra) that action leaves on the mind
The law of karma
Every action produces a result. This is not mysticism -- it is observation. Plant a seed, get a plant. Speak kindly, build trust. Lie consistently, destroy relationships.

The Vedic tradition extends this principle: actions also produce subtle results that may not manifest immediately. These are stored as latent impressions in the subtle body and ripen when conditions are right -- sometimes in this lifetime, sometimes in a future one.
Three types of karma
Sañcita karma: The total accumulated results of all past actions. Like a storehouse of seeds.
Prārabdha karma: The portion of accumulated karma that has begun to manifest in this lifetime. This determines birth circumstances, body type, basic tendencies.
Āgāmi karma: New karma being created right now through current actions.
Karma yoga
The Bhagavad Gītā offers a revolutionary approach to karma: act with full dedication, but surrender the results to Īśvara (the cosmic order).
This does not mean being passive or careless. It means: - Giving your best effort - Accepting whatever results come - Not being enslaved by outcomes - Recognizing that you control actions but not all factors influencing results
Karma and free will
You have free will in your current actions (āgāmi karma). You do not have free will regarding the results of past actions that are already manifesting (prārabdha karma).
This means: you cannot change what has already happened, but you can choose how to respond right now. And that choice determines future karma.
Beyond karma
The ultimate teaching of Vedānta: ātman is beyond karma. Consciousness does not act, does not accumulate karma, does not reap results. It is the silent witness in which all action appears.
When self-knowledge is firm, you continue acting in the world, but without the sense of being a separate doer who accumulates merit or demerit. Action continues. Identification with the actor dissolves.
This is liberation -- not from action, but from the bondage of identification with the actor.
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