If one thinks Advaitic truth is the ultimate truth, then one has to drop all theories based on the physical self (waking entity or ego) as self, because Advaitic truth is based on the soul, which is the true self.
By accepting karma theory one is accepting the false self, as real self, and world as reality, therefore there is no need for self-inquiry “Who am ‘I’? “, because one has accepted the present physical identity and world as reality. Self-inquiry makes one realize the fact that,self is not the body. After knowing the fact that self is not the body, then it is erroneous to think again as the body as self, and holding the ego based theories as reality. Thus karma theory becomes a biggest obstacle in the path of inquiry and truth, because it does not allow the seeker to cross the threshold of duality.
The physical body and the world which exits only in waking (universe or mind or duality) are impermanent and illusory in nature, because they appear and disappear as mind. The soul which is the formless substance and witness of the duality is permanent. Therefore, whatever is seen known and believed and experienced as real within the waking also is as real as dream.
Sage Sri, Sankara says in Aparokshanubhuti:-
88. When the whole universe, movable and immovable, is known to be Atman, and thus the existence of everything else is negated, where is then any room to say that the body is Atman?
89. O enlightened one, pass your time always contemplating on Atman while you are experiencing all the results of Prarabdha; for it ill becomes you to feel distressed.
90. The theory one hears of from the scripture, that Prarabdha does not lose its hold upon one even after the origination of the knowledge of Atman, is now being refuted.
91. After the origination of the knowledge of Reality, Prarabdha verily ceases to exist, inasmuch as the body and the like become non-existent; just as a dream does not exist on waking.
92. That Karma which is done in a previous life is known as Prarabdha (which produces the present life). But such Karma cannot take the place of Prarabdha (for a man of knowledge), as he has no other birth (being free from ego).
93. Just as the body in a dream is superimposed (and therefore illusory), so is also this body. How could there be any birth of the superimposed (body), and in the absence of birth (of the body) where is the room for that (i.e., Prarabdha) at all ?
94. The Vedanta texts declare ignorance to be verily the material (cause) of the phenomenal world just as earth is of a jar. That (ignorance) being destroyed, where can the universe subsist ?
95. Just as a person out of confusion perceives only the snake leaving aside the rope, so does an ignorant person see only the phenomenal world without knowing the reality?
96. The real nature of the rope being known, the appearance of the snake no longer persists; so the substratum being known, the phenomenal world disappears completely.
97. The body also being within the phenomenal world (and therefore unreal), how could Prarabdha exist ? It is, therefore, for the understanding of the ignorant alone that the Shruti speaks of Prarabdha.
98. “And all the actions of a man perish when he realizes that (Atman) which is both the higher and the lower”. Here the clear use of the plural by the Shruti is to negate Prarabdha as well.
99. If the ignorant still arbitrarily maintain this, they will not only involve themselves into two absurdities but will also run the risk of forgoing the Vedantic conclusion. So one should accept those Shrutis alone from which proceeds true knowledge.
The above proves that the karma is reality only on the base of false self, where one thinks body and the universes as reality. When one becomes aware of the fact that, the true self is formless soul, then the karma becomes part and parcel of illusion. My point is that, if one accepts the karma theory as reality, he will never be able to come out of the ignorance. And ignorance makes him believe the cycle of birth, life and death as reality. Thus the freedom which one is seeking will remain distant dream. For the one who accepts the birth life and death as reality, Self-knowledge is impossible.
Thus it is necessary for the seeker of truth to know the fact that, the body which is born, lives and dies is not the self. Since he is taking the body to be the self, he is experiencing the duality as reality.
As Sage Sri, Sankara indicates:- When the whole universe, movable and immovable, is known to be Atman, and thus the existence of everything else is negated, where is then any room to say that the body is Atman.
If body is not the Atman, the innermost self, then the karma theory has no meaning on the standpoint of the truth. Thus no second thing exists other then Atman therefore why to view the worldview on the standpoint of the body as self (waking entity) when the body(waking entity) is the false self, and the Atman (soul) is the true self.
Essence of Astvakara is: Realizing Atman as self, the liberation is possible in this very life right here and right now, not in the next life or next world.
Religion, theories scriptures and concept of god are created as tool for conditioning the mass mind set, to control their individualized mind, to self judge, what is good and what is evil, with the fear of conceptual god, who will in turn punish them, or reward them with good or bad life, in life after life which is only illusion. And this fear helps to maintain peace and harmony in the society to some extent. But man and world exist within the mind and mind is myth on the standpoint of the soul as self, thus all the theories based on the false hood, have no relevance in the realm of the non-dualistic or Advaitic truth.