Manu Smriti 12.60. He who has associated with outcasts, he who has
approached the wives of other men, and he who has stolen the property
of a Brahmana become Brahmarakshasas.
Can a human of degraded character become demon or rakshasa?
Yes, as shown by the verse given above. But obviously that happens in the next life.
Can a human of degraded character become demon or rakshasa? Or can a demon become human through his good character? Justify with refrence of scriptures.
Manu 12.39 - I am now going to describe, briefly, in due order, those migratory states into which one falls through each quality from among these.
40 - Those partaking of ‘Sattva’ reach the state of ...