Most Hindus believe in reincarnation: the belief is that the jiva or essence (often called "the self") of a human being continues to exist after death and is often re-embodied and moves on to a new life.
Hindus also believe in karma, which can be described as an application of the law of cause and effect. The law of karma holds that all actions have consequences. Karma is frequently misinterpreted as being about rewards and punishments, but the classical idea of karma does not involve a one-to-one relationship between good actions and rewards and bad actions and punishments. Rather, it is the view that all actions an individual takes will affect that individual's future in some way or another, and that all chickens will eventually come home to roost. The faith in reincarnation dovetails neatly with the law of karma, as many Hindus believe that an action may affect an individual's future lives as well as the present one. Furthermore, karma is considered to be a continuous process. There is no moment where an individual is judged by God and given a reward or a punishment. Rather, the individual is constantly creating karma and experiencing its logical results.
In Hindu terminology, punya refers to the results of right action and papa to the results of wrong action. A definite way of acquiring punya is by selflessly reaching out to others and through sincere prayer. Reaching out to others is called karma yoga, which results in anthakaranashuddhi: emotional maturity and inner peace.