Sri Aurobindo translates Katha Upanishad, Second Cycle: Second Chapter, Verses 7-8: “For some enter a womb to the embodying of the Spirit and others follow after the Immovable: according to their deeds is their goal and after the measure of their revealed knowledge. This that wakes in the sleepers creating desire upon desire, this Purusha, Him they call the Bright One, Him Brahman, Him Immortality, and in Him are all the worlds established: none goes beyond Him. This is That thou seekest.”
The question posed by Nachiketas constituting the third boon he had been granted by Yama required a very substantial background of understanding about the nature of existence, the soul and the universal creator, and the purpose of life. At long last, Yama is now directly addressing the third boon. The response involves considerable complexity and subtlety which needs to be looked at through various viewpoints in order to yield a comprehensive understanding.
The first issue taken up is the manner in which the soul takes birth in the world. The mechanism is what some call the chain of cause and effect, or the role of karma. Karma means action. Action proceeds from focus and attention. Focus and attention proceed from the promptings of desire in the human being. As we live our lives, we turn our attention to a variety of goals, and with a variable level of focus and intensity. In some cases, we carry out the action under this impulsion, and in others we suppress the action, but retain the impulse as a bottled-up unfulfilled desire. As complex beings with multiple levels of development, physical, vital, emotional, mental, and spiritual, we are actually more of a combination of goals and focus than one single line of action. To the extent that some of these lines of development retain more intensity, they have a greater impact on our direction than those that have less intensity.
When the human being dies, the flow of focus and energy does not simply dissipate entirely with the destruction of the physical being, the nexus of this energy in the present life and personality; rather, the energy continues along its lines of development, with the stronger impulses guiding the soul beyond death and into the next embodiment wherein those impulses can be carried out. Those enthralled by desire for worldly results, power, wealth, sex, physical comforts and well-being, will naturally be drawn to take birth in new bodies that provide opportunities for such fulfillment. Those who, for instance, have followed a spiritual path with strong aspiration may be able to take birth in a body and setting that further supports that development. There is thus, not one single answer for the fate of the soul after death, but rather, a complex inter-relation of “cause and effect”. Even those who do not accept the existence of the soul can nevertheless understand the direction, intensity and flow of energy at different levels continuing on through existing momentum to create the next result in the chain of cause and effect, and thus we come to the position espoused by Buddhist practitioners. The difference between the two is whether there is a “nexus” that carries this stream of impulse forward which can be called the “soul”, or whether it continues without nexus into the universe where it simply creates new forms as needed, and in interaction with similar streams of energy flowing throughout the creation.
Sri Aurobindo, The Upanishads, Katha Upanishad, pp. 213-241, and Kapali Sastry, Lights on the Upanishads, pp. 104-129