Hindu concept of Heaven and Hell

The Hindu concept of heaven and hell can be understood at different levels: physical and mental. Beyond these two levels, which are relative, is the absolute standpoint.

At the physical level: 

The puranas expound on 14 different dimesnion in god's creation, where heaven and hell exists as separate planes of existence. The realms of heaven and hell are described in details in the scriptures and are planes whiere jivas (individuals) exists in their subtle bodies.

Heaven (Swarga) is a plane where departed jivas go to reap the fruits of their virtuous deeds and remain there until their merits are exhausted. In heaven, one knowns no hunger, thirst, or disease, for there is no physical body. The enjoyment in heaven are more intense, subtle and refined, but they still cannot give everlasting peace and bliss. The period for which the jiva stays in heaven depends upon the degree of his past meritorious deeds on Earth.

The puranas speak of hell (naraka) as a plane where evildoers suffer for a period, in accordance with the fruit of their actions. It is presided over by Lord yama, or the lord of death. It punishment meted out in hell is reformatory and educative, and is not remembered by the jiva upon rebirth.

Hindus do no believe in a permanent state of heaven and hell; they are both transitory. An individual goes to heaven or hell depending on his past actions and after exhausting his merits or demerits, come to the life of death. The planes of heaven and hell are thus intermediate stages in the individual's progress toward final liberation. For further study, see Shrimad Bhagavatam. 

At the Mental level:

From subtler standpoint, heaven and hell are mental realms or fields of experience. When one's mind is filled with contentment, patience, compassion, forgiveness, and such values, one experience a great degree of joy and lives in his own "heaven". When one's mind is filled with negativity, such as anger, greed, jealousy, etc, life is miserable and one is living in a self created "hell". Thus, both heaven and hell are mental creations.

From the Absolute Standpoint:

On the absolute level, both heaven and hell are only projection of the mind, just as this waking world of names and forms is but a projection, born of ignorance, on Brahman. heaven and hell are given relative reality only as long as the sense of individuality persists- as long as the individual has not realized his true self. From the absolute standpoint of oneness, there is nothing other than one realty. For further study, see Mandukya Upanishad.