Guna Based Varna System According to Upanishads
The scriptures such as the Niralamba and Vajrasuchika Upanishads clearly refute parents based Varna system and establish guna based Varna ashram.
The Niralamba Upanishad explicitly states that true caste distinctions are not determined by physical attributes/heredity but are attributed through social usage, as mentioned in Verse 10:
"Neither skin nor blood nor flesh nor bone has caste; To self is caste ascribed through mere usage."
Similarly, the Vajrasuchika Upanishad rejects the idea of parents based Varna ashram. It mentions that a particular class cannot solely be Brahmana because many Brahmanas and sages have been born outside a specific class. The Upanishad highlights this in the verse:
Nor is the class a Brahmana. Then there would be many classes within the classes. Many are the great sages: Rishyasringa born of a deer, Kausika of reed, Jambuka of a jackal, Valmiki of an ant-hill, Vyasa of a fisher-girl, Gautama of a hare's back, Vasistha of Urvasi, Agastya of a pot according to tradition. These are not Brahmanas by birth but by their knowledge.
At last uvaach, the Upanishad concludes by describing who a Brahmana is.
I have also debunked a Pauranik claim, which they base on the Chandogya Upanishad (5.10.7). Basically, this reference states that one is born due to karma from past births, but nowhere in that reference does it explain how one's varna will be determined in the next birth. The topic of what varna one will get in the next birth and how that varna will be decided in the next birth are completely different. However, as usual, Pauraniks mix everything to propagate their pakhand. It's like saying that a doctor's son would become a doctor anyhow because he was born in a doctor's house; otherwise, he wouldn't have been born there.
Hence, The concept of past karma does not support Varna system based on parents. Attaining a higher Varna in a subsequent life does not substantiate that one’s Varna is predestined by the Varna of their parents. If someone is destined to attain a higher or lower Varna in the next birth, they can achieve it in any household based on their qualities and actions (As intrinsic gunas are by birth).