The True Self is the soul. Soul is ultimate reality. The three states are unreal but they have no existence without the soul.
The waking and dream of diversity is not apart from the soul, which is in the form of spirit or consciousness but ultimately become one with the soul. The ultimate truth is that Ataman alone is real, and the three states are unreal or an illusion.
Considering physical self/ego/’I’ as the self causes spiritual ignorance. One should learn to distinguish knowledge from ignorance to realize the True Self which is the soul. Self-knowledge is the awareness of the ‘soul’, which pervades in everything and everywhere in all the three states.
