According to almost all of the scholars, the paradise is in seventh heaven and the hell is in the lowest level of the earth.
Al-Bukhaari (7432) narrated from Abu Hurayrah that the Prophet (blessings and peace of Allah be upon him) said: “If you ask of Allah, then ask Him for al-Firdaws, for it is the middle of Paradise and the highest part of Paradise, and above it is the Throne of the Most Gracious.”
Al-Bayhaqi narrated in al-Ba‘th wa’n-Nushoor(455), with a da‘eef isnaad from Ibn Mas‘ood that he said: Paradise is in the seventh, highest heaven and Hell is in the seventh, lowest earth. Then he recited the verses (interpretation of the meaning): “Nay! Verily, the Record (writing of the deeds) of Al-Abrar (the pious who fear Allah and avoid evil), is (preserved) in ‘Illiyyeen” [al-Mutaffifeen 83:18] and “Nay! Truly, the Record (writing of the deeds) of the Fujjar (disbelievers, sinners, evil-doers and wicked) is (preserved) in Sijjeen” [al-Mutaffifeen 83:7]. Al-Bayhaqi said immediately after that: The hadith of al-Bara’ ibn ‘Aazib and Abu Hurayrah about the punishment of the grave, and what they narrated from the Prophet (blessings and peace of Allah be upon him) about the location of the soul of the believer and of the disbeliever are indicative of that.
Al-Haakim (8698) narrated from ‘Abdullah ibn Salaam that Paradise is in the heaven and Hell is in the earth. Classed as saheeh by al-Haakim, and adh-Dhahabi agreed with him.
Al-Haafiz Ibn Rajab (may Allah have mercy on him) said:
‘Atiyyah narrated from Ibn ‘Abbaas, who said: Paradise is in the seventh heaven and Hell is in the seventh earth. This was narrated by Abu Nu‘aym.
Ibn Mandah narrated from the hadith of Abu Yahya al-Qattaat from Mujaahid, who said: I said to Ibn ‘Abbaas: Where is Paradise? He said: Above seven heavens. I said: Where is Hell? He said: Beneath seven seas, one above the other.
Ibn Abi’d-Dunya narrated with his isnaad from Qataadah who said: They used to say that Paradise was in the seventh heaven and that Hell was in the seventh earth.
Some of them quoted as evidence for that the fact that Allah, may He be exalted, told us that the disbelievers will be shown to the Fire morning and evening, i.e., during the barzakh period [between death and the resurrection] and He told us that no gates of heaven will be opened to them. This indicates that Hell is in the earth.
Hence all the above evidences point out that the heaven is in highest of the Illiyyeen and hell is in as sijjeen. Illiyyeen is the highest sky and sijjeen is the lowest earth, as it says in the hadith: “When the person is dying, Allah, may He be exalted, says: ‘Record the book of My slave in Sijjeen in the lowest earth.’” As for Paradise, it is above, in the highest of ‘Illiyyeen. It is proven from the Prophet (blessings and peace of Allah be upon him) that “The Throne of the Lord, may He be glorified and exalted, is the roof of Jannat al-Firdaws.”
Some scholars say that it is beneath the oceans and others are of the opinion that it is the center of the earth. What appears in both cases is that it is present in earth, where exactly, that is not known.
The evidence that Hell is in the earth is the verse in which Allah, may He be exalted, says: (interpretation of the meaning): “Nay! Truly, the Record (writing of the deeds) of the Fujjar (disbelievers, sinners, evil-doers and wicked) is (preserved) in Sijjeen” [al-Mutaffifeen 83:7]. Sijjeen is the lowest earth, and Hell is in the earth.
And Allah knows best.