What is atma?
The word 'atma' means the same as Brahman but is used in a different context. If atma is the space in a pot, then Brahman is the space outside of it. Of course, the quality of space within a pot is no different from the quality of space outside a pot. If the pot is broken, we don't say the space within the pot disappears or merges with the outside space, because space, unlike water or another medium, cannot be cut, divided or separated. Space is always part-less and whole no matter it appearing otherwise.
Similarly, atma is pure awareness associated with an individual. When the body ends its cycle, it becomes recycled material just like everything else in the universe, but awareness remains untouched—not as "David's awareness," "Susan's awareness," "John's awareness," etc. but as the single awareness principle.
Atma is also sometimes likened to electricity's effect on a light bulb in the way atma vivifies the individual. Atma‘s (consciousness's) mysterious relationship to life is essential and continues to boggle scientists—and will continue to do so for the unseen future due to atma not being objectifiable and thus, not perceptible or measurable using the senses or other instruments.
Another meaning of atma is "breath," from the verb-root 'at' = to breathe." A breath of air into a flute, clarinet, or other wind instrument, creates a unique sound. Without the breath, the instrument is inert without expression. Atma "breathes" life into a body-mind-sense vessel, which, due to its varying qualities, will also be expressed differently. Vedanta tells us that consciousness is one, but is expressed differently depending on the reflecting medium (in this case, a body-mind-sense complex).
If we examine the nature of atma, there are five salient features:
Atma is not a part, product or property of the body
Atma exists on a different order of reality than the body. What affects the body doesn't affect atma, just like what affects a pot never affects the space within the pot. Bodies come and go, but atma always remains the same because atma is that which is beyond objects, including time and even space.
It is an independent factor that pervades and enlivens the body
Unlike the body, which is dependent on atma, atma is not dependent on anything for its existence. The best comparison is to a light bulb or computer desktop. What is just inert matter apparently comes to life provided electricity. However, the electricity is not dependent on the hardware or software in any way. Furthermore, the same electricity that enlivens a computer desktop is the same electricity that powers a blender, hair dryer, television, etc.
It is not limited by the boundaries of the body
Although atma is awareness associated with a body, it is never contained by it. Again, it's only an appearance that the space within a pot is contained, because space is indivisible.
It continues to exist even after the body dissolves
Atma is that which comes before the body and remains after. There's a cognitive shift when one realizes that consciousness doesn't come out of the body but rather, the body comes out of consciousness. Just like space, all objects come out of and resolve back into consciousness. To use our pot metaphor once more: we can get rid of the pot, but not space. Space is that which is before, during and after the pot.
It is not born nor does it die. It survives the death of the body.
This goes back to the point made earlier. There is no "David's awareness," "Susan's awareness," etc. There is only awareness because atma is impersonal. At death, the pot space apparently merges with the outer space. Any idea that there is plurality is only an appearance. This fact becomes evident when one realizes that the body is just a composition of what Vedanta calls "the five basic elements" (space, air, fire, water, earth). A more condensed version is we are all just walking earth—that is—walking earth with awareness.
Lastly, another word for atma is "the Self"—my true essence and greatest object of devotion shining as pure, attributeless, limitless awareness.