When there is exact balancing and overlapping of good and bad sanskaras, they both disappear; with the result that what remains is a clean slate of mind on which nothing is written and which therefore reflects the Truth as it is without perversion.
Nothing is ever written on the soul. The sanskaras are deposited on the mind and not on the soul. The soul always remains untarnished, but it is only when the mind is a clean mirror that it can reflect the Truth. When the impressions of good and bad both disappear, the mind sees the Soul. This is Illumination.
The mind seeing the Soul, however, is not the same as the Soul knowing itself, for the Soul is not the mind but God, who is beyond the mind. Therefore, even after the mind has seen the Soul, it has to be merged in the Soul if the Soul is to know itself as Truth. This is Realization. In this state the mind itself with all its good and bad sanskaras has disappeared. It is a state beyond mind, and therefore it is also beyond the distinction of good and bad. From the point of view of this state there is only one indivisible existence-characterized by infinite love, peace, bliss, and knowledge. The perpetual strife between good and evil has disappeared because there is neither good nor evil, only the one inclusive and undivided life of God.
-Extracted from “Discourses”, 7th Ed, p65