From the dualistic perspective, the ‘I’ is a reality. From a nondualistic perspective ‘I’ is an illusion.+

The ‘I’ is both real and unreal. It is real because it is a manifestation of the Soul, which is present in the form of consciousness, but is unreal, in the sense, that it is not absolute and eternal like consciousness itself.

From the dualistic perspective, the ‘I’ is a reality. From a nondualistic perspective ‘I’ is an illusion. 

Bhagavad Gita: ~ “You must first see the ‘I’ as illusory before you see others as illusory. ~ CH.2 v.16

People say I AM THAT ~ I am God, I am Brahman. But when Brahman is, how can "I" remain? Only Brahman remains, not 'I'. 

It is erroneous to use the word ‘I’ for the Self, because ‘I’ represents form, time, and space whereas the Soul, the Self is a formless, timeless, and spaceless existence. 

Bhagavad Gita: ~ The permanent is always there, only the transient ‘I’ comes and goes. (2.18)

The ‘I’ disappears as deep sleep, so what is the use of being attached to it? It is impermanent and illusory because ‘I’ is physical awareness. Physical awareness is not Self-awareness. ‘I-less awareness is Self-awareness. 

It is erroneous to identify the Soul the Self as 'I' or 'I AM' because the Soul the Self is not 'I' or I AM’. The Soul the innermost Self, is that witness of the 'I'.

To understand the false nature of the ‘I’, Self-knowledge or Brahma Gnana or Atma Gnana is necessary. 

The Self is not ‘I’, but the Self is the Soul which is the witness of the ‘I’. Holding the ‘I as the 'Self' leads to hallucination based on the imagination. : ~Santthosh Kumaar