"Sherlock" Season 3 Episode 1, "The Empty Hearse," revealed how Sherlock faked his death. It was a simple, non-technical, not-genius explanation. To Anderson, Sherlock said the roof-top interaction between him and Moriarty was the result of an elaborate plan, set in motion by Mycroft.
To save his friends, Sherlock had to commit suicide, jumping from the roof of the hospital building. At the time, Mycroft had put in action an act to save Sherlock and his friends. Molly had played a vital role, and she was one of the persons who knew that Sherlock was alive.
In an interview with BBC, Mark Gattis and Steven Moffat, co-creator of "Sherlock," said that they started work on series 2 when they haven't even ended. They knew that Sherlock wouldn't cheat and that he would die and he would die in Watson's arms. The two were surprised to see the theories that came-up on how Sherlock survived. The jump, Moffat said "kick started an entire nation it seems into trying to work out how it was done." It was done to far greater extent to what they had imagined.
Pulling off the deception was not easy writing. Moffat said that they worked over it "very carefully." They considered what elements need to be in place. When the viewers see the key ingredients, "it won't feel like a cheat," said Moffat.
Benedict Cumberbatch, who plays Sherlock, was out of UK when his character had jumped down from the roof. The actor said that he would have loved to see the nation obsessing about Sherlock's jump. Cumberbatch came-up with his own bizarre theory and talked about his flying suit. He said that when someone falls further than the 100 feet, then that person can basically start to glide thanks to the flying suit.
How Sherlock Cheated Death:
At the time, Sherlock, ready to take the jump, had asked Watson to keep looking at him and nowhere else. It was to stop him from watching the act put in motion to save Sherlock. Mycroft had planned the escape Sherlock. There were a group of people posing as doctor, nurses, biker and onlookers. A huge air bag was placed to cushion the fall of Sherlock. Once Sherlock had safely landed, the bag was taken away, thanks to the ambulance station. The corpse of one of Moriarty's men -- who resembled Sherlock and had scared the kidnapped children of a boarding school -- was pushed down by Molly from a window of the hospital building, making it look like Sherlock has jumped down to his death.
The corpse was taken away from the spot for a while to deceive Watson. Sherlock took the place of the corpse on the street. A squash ball was used to stop his pulse, temporarily. Hit by the biker on the street, shocked and dizzy, Watson had fainted after he checked the pulse of Sherlock, thinking his best friend is dead.