Good actions result in reward in the future, in future lifetimes. Bad actions result in some kind of suffering, which you can say is a punishment. If someone does a lot of good actions, they could go to swarg (heaven), and if someone does a lot of bad actions, they could go to narak (hell).
अथैकयोर्ध्व उदानः पुण्येन पुण्यं लोकं नयति ।
पापेन पापमुभाभ्यामेव मनुष्यलोकम् ॥Athaikayordhva udānaḥ puṇyena puṇyaṁ lokaṁ nayati.
Pāpen pāpamubhābhyāmev manuṣhyalokam.- Prashna Upanishad 3.7
Mundakopanishad also says, “If you do puṇya (virtuous deeds), if you do a lot of good actions, you go to swarg. If you do a lot of bad actions, you go to narak, and if you do a mixture of the two, you are immediately reborn here.”
Shree Krishna is giving Arjun some incentive. But it is the type of incentive which is only useful to an agyani (ignorant person). This is the type of incentive which will motivate someone who believes himself to be the body. If someone has understood that he is the soul, this incentive will not motivate him at all.
Why? Imagine, Shree Krishna is telling Arjun, “If you fight the war and win, you’ll become king, and you’ll enjoy the pleasures of this world.” Arjun is thinking,
न काङ्क्षे विजयं कृष्ण न च राज्यं सुखानि च ।
Na kāṅkṣhe vijayaṁ Krishna na cha rājyaṁ sukhāni cha.
- Gita 1.32
“I already told him I have no desire for the pleasures of kingship. I’ve already experienced that. I know there’s no true happiness in that. You Yourself have just explained to me the fleeting and limited nature of worldly pleasures, and now you’re dangling that in front of me as if it’s some kind of incentive to do my duty. In addition to that, you’re saying that I may get to go to swarg.”
However, listen to what Shree Krishna says about swarg right here in second chapter,
यामिमां पुष्पितां वाचं प्रवदन्त्यविपश्चित: |
वेदवादरता: पार्थ नान्यदस्तीति वादिन: ||Yāmimāṁ puṣhpitāṁ vāchaṁ pravadanty-avipaśhchitaḥ.
Veda-vāda-ratāḥ pārth nānyadastīti vādinaḥ.- Gita 2.42
He says, “O Arjun, those who dream of going to swarg and perform a lot of good actions with so much effort in order to attain swarg, they are foolish.”
(नान्यदस्तीति वादिन) Nānyad astīti vādinaḥ - those vādinaḥ (arguers), those talkers who tell you that going to swarg is such a great thing, that you should strive to go to swarg - they are fools. And those who listen to their talks and follow what they say, they are even more foolish.
Why?
इष्टापूर्तं मन्यमाना वरिष्ठं नान्यच्छ्रेयो वेदयन्ते प्रमूढाः ।
नाकस्य पृष्ठे ते सुकृतेऽनुभूत्वेमं लोकं हीनतरं वा विशन्ति ॥Iṣhṭāpūrtaṃ manyamānā variṣhṭhaṃ nānyacchreyo vedayante pramūḍhāḥ.
Nākasya pṛiṣhṭhe te sukṛte’nubhūtvemaṃ lokaṃ hīnataraṃ vā viśhanti.- Mundak Upanishad 1.2.10
The Vedas say that those who go to swarg are pramūḍhāḥ (extremely foolish).
So it means Shree Krishna is trying to make a fool of Arjun by telling him, “Do your duty and you’ll get to go to swarg”? Why is it so foolish to go to swarg? Because it takes so much effort to accumulate enough good actions in one lifetime to earn a trip to swarg, and once you get there, it is only temporary. You stay there for some time and then you come back here - right back where you started.
You won’t come back in the same body looking like you do now. In fact: (हीनतरं वा विशन्ति) hīnataraṃ vā viśhanti - you may be born in lower species before you again get a chance to be born as a human.
