Karma according to the Jains is of material nature or paudgalika. The Jains conceive that that thoughts and ideas affect the character of individuals and create or modify the tendencies of their souls. Karma is a substantive force, matter in a subtle form. The kind of matter fit to manifest karma fills all cosmic space. It has the peculiar property of developing the effects of merit and demerit. The soul by its commerce with the outer world becomes literally penetrated with the particles of subtle matter. These become karma and build up a special body called karmanasarira, which does not leave the soul till its final emancipation. This karmic matter retards the radiance of the soul.

Bhavakarma is immediate to the jivas, while dravyakarma belongs to the body. The two are associated together, though they are distinct and separate as the conscious or chetna and the non-conscious or achetana. Karma works in such a way that every change which takes place leaves a mark which is retained and built into the organism to serve as the foundation for future action. It is there actual and acting in the nature of the jivas.

The five classes of karmic conditions that are mentioned determine a mental condition or bhava corresponding to it. On account of the rise, suppression, annihilation, mixed suppression or unconditioned thought, the jiva has five bhavas or thought conditions. The last is unconditioned by karma, while the four others are conditioned by changes on the physical side. In the usual course of things karma takes effect and produces its proper results.

The soul according to the Jain Philosophy is said to be in the Audayika state. By proper effort karma may be prevented from taking effect for some time. Though it is neutralised, it is still present, like fire covered by ashes. The soul is then said to be in the Aupasamika state. When karma is not only prevented from working, but is annihilated altogether, then the soul is in the Ksayika state which leads to Moksa. There is a fourth state of the soul, Ksayopasamika, which partakes of the nature of all the preceding ones. In this condition some karma is annihilated, some are neutralised and some are active. It is the state of those whom one can call well, while the Ksayika and Aupasamika states belong to those of holy men.

Except in final release the soul is always in connection with matter, the link between the two being karma. The jiva, according to the Jain Philosophy is characterised by knowledge, and though it has no form, yet it is an agent enjoying the fruits of karma and possessing the same extent as the body. It undergoes real changes; otherwise it cannot be a causal agent. It is the upadanakartr or the material cause of bhavas, or thoughts, while karmic matter is the nimitta, or the determining cause.

The link of union between jiva and ajiva is karma. The production, fruition and destruction of karma, together with jiva and ajiva, are the principles or tattvas of Jainism. Jiva and ajiva are the main principles, which are generally united. The absolute liberation of jiva from ajiva is moksa. It is the goal of all endeavours. This ideal can be realised only by the stoppage and shedding of karma.

The cause of the soul`s embodiment is the presence in it of karmic matter. It is this that spoils the natural qualities of the soul, knowledge and intuition. The soul is never completely separated from matter until its final release. Thus the defilement of the soul happens. As a particular karma is caused by some act, good, bad or indifferent, so it in its turn produces certain painful or pleasant consequences. When a particular karma produces its effect it is purged from the soul, and if this process of discharge should take place uninterruptedly, all taint of matter will be abolished. But, unfortunately, purging and binding go on together, and the soul continues to move in the circle of sarhsara. At death the soul, with its karmana-s`arira, goes in a few moments to the place of its new birth, and there assumes a fresh body, expanding or contracting according to the dimensions of the latter. The mundane souls are divided into four classes according to the place of their birth: (1) those born in hell, (2) those in the animal world, (3) those in human society, and (4) those in the divine kingdom.