Limiting the the soul to the waking entity is cause of ignorance. The soul is in the form of consciousness. The consciousness pervades in everything and everywhere in all the three states. The consciousness is our innermost self. The three states are mere mirage created out of soul. Soul is the whole experience of the three states. The ego ( waking entity or ego) is present within the waking or dream. The soul is within but always apart. There is no real difference between mind and the soul on the standpoint of the formless soul as self. The diversity is because of viewing and judging the worldview on the standpoint of the physical self or ego. The mind is of identical essence with the soul. In the realm of truth the mind is one with the formless soul. formless soul or consciousness is as real and eternal.
The ego or physical self is not the self. The veil of ignorance is the cause of experiencing the duality as reality. The illusion is superimposed on the formless Soul, the innermost self. Through Self-Knowledge or Brahma Gnana or Atma Gnana one attains the non-duality and the duality ceases to exist as reality.