Corotime

var Timer: int = 0;

function Update () {
Timer++;
guiText.text = "Timer: "+Timer;
yield WaitForSeconds(1);
}

But it says as error
Script error: Update() can not be a coroutine.

So what shall i use instead of Update?

A different function.

var Timer: int = 0;

function Start () {
    OtherFunction ();
}

function OtherFunction () {
    Timer++;
    guiText.text = "Timer: "+Timer;
    yield WaitForSeconds(1);
}

Thank U

btw it’s easier than C#.
On C# you must have a function that return a IEnumerator and

yield return new WaitForSeconds(1);

Source: http://unity3d.com/support/documentation/ScriptReference/MonoBehaviour.StartCoroutine.html