Paralokavada in Hinduism is the principle of the existence of the self in another world after death in this world. The basis of theory in Hindu philosophy is twofold – immortality of the self (atma) and the principle of karma phala – the consequences of one’s deeds have to be inevitably enjoyed even after this life.
If the self is immortal and eternal, the self will necessarily exist somewhere even after the destruction of the body here. If it cannot be located in this world, then it means it stays in some other world (paraloka). Even rebirth on this earth is paraloka for the self, because in the new grown body it is a new world for it.
In Katha Upanishad, Yama states – “After death, some selves reach in some species’ womb to achieve the body and others have to undergo immovable (trees, etc) physique as per deeds and knowledge” (Katha Upanishad 2/2/7). Here, the Upanishad reiterates the statement of Yajurveda which tells: those who ruin the self (by ignorance), go, after death, to the lokas surrounded by darkness (Yajurveda 40/3).
Chandogya Upanishad describes in detail the paths and destinations of selves after physical death (Chandogya Upanishad 5/10/1-10). The Bhagavad Gita mentions two types of future destinations after death for yogis, one for those who attain Brahman as permanent salvation and another for those who enjoy dwelling in Candrama’s loka (heaven) and return back to this world when the good fruits of their deeds are spend (Bhagavad Gita 8/24-26).
The Puranas describe 21 narakas in Yama loka, where the sinners selves are kept and punished. They also describe seven higher lokas as bhukoka (earth), bhuvarloka, svarloka, maharloka, janah loka, tapah loka and satyaloka and seven underworlds as atala, vitala, sutala, talatala, rasatala, mahatala and patala. In between these main ones are many more, less important lokas. Departed selves from the earth may reach any of these lokas according to their deeds, pious to higher lokas and heinous to lower. Birth as a human being is karma loka (world of action). Other species and lokas are for phala loga (enjoying the fruits of the actions performed as a human being).
Source – Encyclopedia of Hinduism Volume VIII page 56 published by IHRF – Rupa