Naraka is the underworld of punishment shared, with variations, by Hinduism, Buddhism, and Jainism, and its defining feature, the point that most distinguishes it from the hell of the Abrahamic traditions, is that it is temporary. Presided over in the Hindu conception by Yama, the lord of the dead, and administered by his recorder Chitragupta, Naraka is not one place but many hells (the texts enumerate them, often twenty-eight, each suited to a particular class of sin, a hell of boiling oil for one offence, of cutting blades for another).
The soul that has accumulated bad karma suffers there in proportion to its deeds, but only until that karmic debt is worked off, after which it is released back into the cycle of samsara, rebirth, to continue its journey. Naraka is thus a station within the wheel of rebirth, not a final destination: a place of consequence and purgation rather than of everlasting damnation. This reflects the deep logic of the karmic worldview, in which no state, neither the hells nor even the heavens like Svarga, is permanent, because all are the impermanent fruit of action, and the true goal lies not in reaching a good realm but in moksha, liberation from the cycle altogether.