When should hands be raised during the prayer?

Praise be to Allah.

It is Sunnah to raise one’s hands in four places during the prayer:

When pronouncing Takbeer al-Ihram (the first Takbeer), when bowing in Rukoo’, when rising from Rukoo’ and when standing up after the first Tashahhud. Ibn ‘Umar (may Allah be pleased with him) narrated that when the Prophet (peace and blessings of Allah be upon him) started his prayer, he would say “Allahu akbar” and raise his hands, when he bowed in rukoo’ he would raise his hands, when he said “Sami’a Allahu liman hamidah [Allah hears those who praise Him]” he would raise his hands, and when he stood up after two Rak’ahs he would raise his hands. (Reported by al-Bukhaari, 2/222; Abu Dawood, 1/197).

The meaning of “when he stood up after two Rak’ahs he would raise his hands” is, when he stood up after the first Tashahhud.

The hands may be raised to the level of the shoulders or the ears. See Al-‘Ayni fi’l-‘Umdah, 5/7; Sharh Muslim by al-Nawawi, 4/95; Sifat Salaat al-Nabi by al-Albani, 87.