Awareness naturally senses itself as timeless (somehow beyond time/space)…
Idenitified with Inner Processes
When awareness is identified with inner phenomena – sensations, emotions, thoughts – it sees itself as the processes of the personality.
The sense of itself as timeless is then applied to the personality. Maybe not to this physical body, but at least something – the sense of identity formed by identifying with the inner processes – continues after death. This is then called the “soul”. Awareness mistakes the impermanent for the timeless.
Aware of Itself as Distinct
When awareness is aware of itself as distinct from its content – the unfolding experiences of the inner/outer world, it recognizes itself as (apparently) timeless. It is luminous space within which phenomena unfold, and dualities or any particular form or characteristic does not seem to apply to it. Seeing itself as timeless allows it to recognize all inner/outer phenomena as fluid, impermanent.