Next to the baby’s head, like this (image courtesy CarSeatSite.com):
Next to the baby’s body, like this (image courtesy Car Seats For the Littles): Note that the picture on the left is a MISUSE picture.
Or between crotch strap and baby, like this (Image courtesy Louisiana Car Seat Mom):
For more on infant (bucket) seats, check out this article “Where does the handle go?” from CSFTL or this article, called “The picture guide to car seat safety” from the Daily Momtra.